• Is any special licence required to sell rare coins?
  
• I don't know anything about rare coin investments.
  
• Is this a rare coin fund?
  
• Why do I need rare coins in my client's portfolio?
  
• I don't think my clients want to be coin collectors.
  
• What is an investment grade rare coin?
  
• What does certified mean? Is it necessary?
  
• Where does my client store rare coins?
  
• How are rare coin portfolios selected?
  
• Why invest in U.S. coins? What about Canadian coins as an investment?
  
• How much of a portfolio should be in rare coin investments?
  
• Does the price of gold or silver have any effect on the price of rare coins?
  
• How can I keep track of how my client's rare coin investment is performing?
  
• How long should an investment in rare coins be held?
  
• How easy will it be for my client to sell their rare coins?
  
• How have rare coins done as an investment?
  
• Would my client's estate be subject to U.S. inheritance taxes?
  
• Who is U.S. Tangible? Why should I deal with them?
  

A. "No. There are no special licences required for a financial advisor to be able to sell rare coin investments. However, if you hold a licence to sell mutual funds or securities, you should be aware of any provincial securities commission statutes that require disclosure so as not to violate the full time requirement of your licence."

Q. "I don't know anything about rare coin investments."

A. "That's why you should deal with a company of long standing reputation and integrity. U.S. Tangible has worked exclusively with professional financial advisors who have placed their investing clients in confidence with U. S. Tangible since 1978. We recognize the special requirements and concerns of investors and our programmes are designed to make it easy for you to buy, track and sell your investment in coins. Importantly, we work with investors through their financial advisors. The investment is suitable for your client's portfolio since you and your client decide on the priority of investment, not the selling firm."

Q. "Is this a rare coin fund?"

A. "No. In a rare coin fund, you receive a certificate for only partial ownership of a coin portfolio. There are additional fees in a fund for management, legal costs, distribution and storage. A fund splits the profit between the general partner (the person who manages the fund) and the limited partner (the investor). In a fund, all control belongs to a general partner. In the USTIC programme, there are no additional fees or splitting of profits. Full control of the portfolio is with the investor."

Q. "Why do I need rare coins in my client's portfolio?"

A. "The answer is diversification. The majority of your product offerings are in equity or paper investments, such as stocks, bonds, mutual funds, annuities and the like. These make up the vast bulk of your client's assets and in most economic scenarios will provide safety and growth. However, there are certain times when tangible or real assets are important to your portfolio. One of the most time tested methods of "wealth insurance" has been rare coin investments. They are easy to store, easy to value, easy to transport and easy to sell. It is for this reason that clients should have a portion of their portfolio in rare coins."

Q. "I don't think my clients want to be coin collectors."

A. "That's right! Investing in rare coins is entirely different than collecting. You don't have to be an actuary to invest in annuities, nor a petro-geologist to invest in oil and gas programmes. Well, you don't have to be a coin collector to invest in rare coins. That's where U.S. Tangible makes the investment process easy to implement and understand, from the point of purchase to the time of liquidation."

Q. "What is an investment grade rare coin?"

A. "Many coins can be considered 'investments' for a number of reasons. However, for the typical non-collector investor, these general guidelines should be used:

1. United States coins only
2. Dated prior to 1934
3. The condition or "grade" is Mint State (MS) or Proof (PF) 63 or higher (64, 65, 66 or 67). Prices of coins graded 68 to 70 are very difficult to determine due to extreme rarity and should be avoided.
4. All coins must be graded by either the Professional Coin Grading Service (PCGS) or the Numismatic Guaranty Corporation (NGC).
5. Prices should be a function of the Certified Coin Dealer Newsletter (CCDN) and Coin Dealer Newsletter (CDN).
6. The population of the coin (the number of coins that have been graded by either PCGS or NGC) is low for the series whenever possible. This is available from the current edition of the PCGS or NGC Population Reports."

A. "Certification by one of the recognized independent grading firms, either the Professional Coin Grading Service (PCGS) or the Numismatic Guaranty Corporation (NGC) provides the assurance of an independent 3^rd party verification of the grade of the coin. Further, this insures that your client's coin is not a counterfeit and the grade assigned was issued in conformity with the industry standards of one of the leading grading services (not assigned by a ‘selling' firm). The holder will also provide for the physical protection of the coin itself. All these benefits make certification a very necessary part of rare coin investments."

Q. "Where does my client store rare coins?"

A. "Rare coins are very easy to store. They can be stored in a safe deposit box at your client's bank or in a home safe. Since the coins are in sonically sealed, tamperproof plastic cases of uniform size, they do not require much space. In addition, your clients will receive "tangibles binders" that contain the invoice, descriptions, histories and color photographs of all the rare coins in their portfolio. Your clients may keep this binder at home to showcase their investment while keeping the actual coins secure in their bank vault or home safe.

In addition, U.S. Tangible has a free U.S. storage programme for Canadian investors. This will enable your client to participate in rare coin investments and totally eliminate the additional 7% Goods and Services Tax. In the provinces of New Brunswick, Nova Scotia and Newfoundland, the storage programme will eliminate the 15% Harmonized Sales Tax (H.S.T.). (See section "Rare Coin Investments and GST/HST")"

Q. "How are rare coin portfolios selected?"

A. "After the question of suitability of investment is answered, we will work with you to determine your client's investment goals, time frame and amounts to invest. Using the criteria on the selection form coupled with the input from you and your client, a portfolio will be put together. The number of coins will be dependent upon the amount invested. Typically, for a $10,000 portfolio, there may be four to six coins included."

Q. "Why invest in U.S. coins? What about Canadian coins as an investment?"

A. "There are some Canadian coins that are excellent investments. However, part of the evaluation process of an investment is it's overall size or market. U.S. rare coins enjoy the largest market in the realm of coin investing. U.S. rare coin prices are quoted weekly in independent publications, they are traded on an electronic exchange, much like the stock market, and have more data available than any other coinage. The larger and more available the information on an investment, the easier it is to determine its suitability for the investor."

Q. "How much of a portfolio should be in rare coin investments?"

A. "Generally 5-15% of a growth portfolio can be in rare coins. The typical investor usually has at least 10% of his growth assets in rare coins. The actual percentage that is suitable for your clients can be easily determined by a review of your client's present holdings. U.S. Tangible depends on the input of the financial planner to insure that the investment is appropriate for the client."

Q. "Does the price of gold or silver have any effect on the price of rare coins?"

A. "For investment quality coins, the effect of bullion price movements is minimal, if any. These coins have value due to their rarity and collector demand rather than any intrinsic metal content. For example, in the art world, the value of a Picasso is not based on how much paint, wood or canvas is used to create the work. The same is true with rare coins. An investor who buys a $20 gold piece for $5,000 is not concerned that the coin contains about an ounce of gold currently worth $350.

In lower quality coins, those that are of poor condition and easily obtained, the price is determined largely by bullion price movement. In this example, a poor quality $20 gold piece that is sold for $420 has over 80% of its value based on bullion content."

Q. "How can I oversee the performance of my client's investment?"

A. "It is easy. U.S. Tangible will provide a written evaluation for you, at no charge, at least annually--on your request. If you need more frequent reviews, simply place a toll-free call to our offices. All the evaluations are done by computer and are based on the up-to-date values provided by the most current independent sources. You will obtain the value of your client's rare coin investment as easily as you would determine the value of an annuity."

Q. "How long should an investment in rare coins be held?"

A. "Like any other investment, rare coins are cyclical in nature. They go up and down in value based on economic conditions, market supply and demand. In the past, these cycles occurred every four to six years, so as a rule your client should plan to commit funds for this period of time. However, when short term gains are realized prior to the recommended holding period, you and your client can review the portfolio and take profits where available."

Q. "How easy will it be for my client to sell their rare coins?"

A. "Rare coins are among the most liquid and easy to sell tangible assets. Your client may elect to sell them back through U.S. Tangible at any time. We will provide a firm wholesale price offer based on the then prevailing market wholesale prices. This method takes no longer than 5 business days. An additional method of liquidation is through one of our affiliate's many rare coin auctions. Auctions are conducted approximately once a month at major rare coin shows throughout the United States, where your client's coins are exposed to the largest number of interested buyers. Depending on which type of auction your client chooses, the selling process is anywhere from 1 month to 3 months. Our auction affiliate takes control of the entire process from the time of consignment to sending your client's settlement cheque. So, whether they choose to sell directly or at auction, selling is a snap."

Q. "How have rare coins done as an investment?"

A. "Like any other investment, it depends on the time frame that is examined. For example, in the U.S., real estate has traditionally been a good investment, yet investors have lost billions since 1987 due to tax law changes and speculation. But there is a difference in investment risk. First, there is market risk , which is a integral part of all investments and is what we accept when we make the investment. It simply means the market can and does go up and down in value. The second type of investment risk is due to improper advice, greed, fraud or any combination of those factors. In rare coins, many people who waited to participate until the peak of the market in the Summer of 1989 have seen values decline 50% or more. No one can control the market risk factors, but you can help your client minimize them by analyzing the market position and conditions before they invest. You can definitely control the other risk factors by dealing with only the oldest, most reputable and experienced firms that have stood both the test of time and good and bad markets."

Some clients who have bought rare coins in the past two years have had excellent profits.

Q. "Would my client's estate be subject to U.S. inheritance taxes?"

A. "No. Rare coins are not a security or a titled physical asset such as real estate. In the event of a transfer of ownership due to a death or otherwise, a simple letter of instruction, properly witnessed, to our offices is all that is required to complete the transaction."

Q. "Who is U.S. Tangible? Why should I deal with them?"

A. "U.S. Tangible has been the dominant firm in the U.S. rare coin investment industry since 1978 and has been successfully working with Canadian investors since 1986. We are not a telemarketing firm but work with clients only through their financial advisors. U.S. Tangible has specialized in bringing our programme to Canada. For example, we have instituted an insured storage plan to eliminate GST and HST, developed brochures and materials especially for the Canadian market and have become active participants within the Canadian financial planning industry.

In addition, we provide to financial advisors comprehensive training programmes that are accepted for continuing education credit by the Canadian Association of Financial Planners and the Board of Standards of Certified Financial Planners.

We are an affiliate of the largest rare coin firm in the world, Heritage, which has independently audited sales of over $165,000,000 a year as documented by KPMG Peat Marwick. Our auction affiliate is one of the world's largest and has conducted more official auctions for the American Numismatic Association since 1980 than all other auction firms combined."