You can make an astounding amount of money in coins…

348%
1,195%
665%

These numbers don't represent "getting lucky" on one coin investment. These numbers are the percentage gain in the entire CU3000 coin index (www.coinuniverse.com) over the last three coin bull markets (1972-74, '76-'80, and '87-'89). And we may be on the brink of the next major coin bull market right now. However…

You can also LOSE an astounding amount of money in coins…

After the last peak (1989), the coin index lost about three quarters of its value before bottoming in 1995. Individual investors likely did worse. After a NASDAQ-style crash like that, the coin market is only a shadow of its former self, and is now finally in an uptrend on increasing demand. But it took many years to find the bottom.

Let's take a quick look at the coin market, and then a quick look at why the current prospects are attractive…

Coin Market Basics Any Investor Should Know

1. One reason big gains can happen in coins is simply because the market is very small compared to the stock market. It doesn't take much interest in coins to drive prices substantially higher.

2. There are two primary areas of coins: bullion coins and numismatic coins. Bullion coins are often in large supply, in current production, and, most importantly, they are most affected by the price of gold. They generally sell for prices very close to the price of gold. Numismatic coins are coins with some type of collector's value. They are less affected by the price of gold and more affected by things like investor demand, rarity, and coin "quality."

3. There are two major coin grading services that judge a coin's quality: PCGS and NGC. When considering buying a coin, make sure it has been rated by either of these. The higher the grade, the better potential for return in a coin bull market, according to hard-asset expert Michael Checkan. He likes grades of "MS-65 or higher."

4. It is extremely difficult to make money in coins. There are a few things that rare coin experts like Mike Fuljenz recommend to make sure you're one of the (potentially big) winners:

How To Make Sure Your Coin Investment Is Solid

Know your coins as best as you can. Mike offers many coin guides (www.universalcoin.com), and you ought to get a copy of The Red Book, which has all American coins made (make sure you stick with American coins), the number of coins made, a rough value, and a little story about each. The Red Book is cheap, and worth it.

Deal with a reputable dealer. Who you work with may be the difference between making a lot of money or having all your money taken from you. The coin business is not regulated by the SEC or any entity like it. A few things to look for in a coin broker…

-Longevity. In 1980 there were 5,000 coin dealers. Today there are about 500. If a dealer has been around for a decade, that means he didn't appear recently, fleece people, and then disappear.

-Check out their history. Ask the dealer for a bio, and check it out. Check with the Industry Council for Tangible Assets. Contact the Better Business Bureau in their jurisdiction. Do as much due diligence as you can. These are not typical, regulated investment businesses.

Take delivery of your coins when you buy them. It's a little more of a pain, but it's worth it. What if the dealer goes belly up? What's your recourse? Nothing… For a few extra bucks, you have security that you're in charge of your investment.

Have a long-term investment horizon. The cost of buying and selling coins (especially rare ones) is higher than with other investments. Simply put, it is a smaller market, so it is quite often tough to find a buyer when you're a seller. So you may pay $550 for a $500 rare coin, but if you wanted to sell it tomorrow, you may only get $450. (This is not a real spread, it's just to make an example.) If you have a five-year time horizon, and you catch a huge bull market, you'll forget all about that spread. However, if you need to cash out early or quickly, you may take a hit. Consider being on board for a minimum of 2 years, but 5 years would be better.

Why Are Coins Worth Your Attention Now?

Coins are attractive to me right now for many reasons. First of all, I like to invest in neglected assets that have the potential for large rises. Having fallen by 70% eight years ago, the small number of people who used to be interested in coins has about given up. This is about as neglected an asset class as you'll find.

Second, I like to buy neglected assets when they start to trend higher in value. And coin values have been steadily rising all year.

Third, coins tend to do well after gold does well. Gold tends to do well in times of crisis and uncertainty. Gold is up in the last year, and so is crisis and uncertainty.

Coins are likely cheap and unloved, with little (but increasing) demand out there. Since the market is so small, it will only take a small increase in demand to cause a large price rise.

Today's IU Crib Sheet

• I'm here at our 5th Annual Investment U Seminar. It has just been fabulous so far. I had breakfast this morning with Mike Fuljenz of Universal Coin (www.universalcoin.com tel: 800.459.2646). And I sat down today and spoke for a while with Michael Checkan of Asset Strategies (www.assetstrategies.com tel: 800.831.0007). I've known these two for a while, and they've been a part of the coin business for decades. I'm certainly no expert on coins, and I leaned on them for most of what I shared with you today. You can lean on them too (and the other Oxford Club recommended dealers) to learn more about the coin market before investing.
• Mike Fuljenz gave a presentation today at the seminar on the five historical trends that influence rare coin bull markets: Let me share them with you:

A. Economic and Political Uncertainty
B. A Bear Market in Stocks
C. Interest Rate Uncertainty/Activity
D. Rising Energy Prices
E. Increasing Demand for Precious Metals

All five of these suggest an upcoming bull market in coins… something worth paying attention to.

• Time is running out for you to sign up for The Agora Wealth Options Seminar. This event - which will be held April 24-25 in Baltimore - is being billed as the world's greatest options event… and I urge you to consider attending. Join a panel of options specialists and market experts such as Options Hotline's Steve Sarnoff, Q-Wave's Bryan Botterelli and Adam Lass, Contrarian Speculator's Lynn Carpenter and world-renowned author and trading coach Dr. Van K. Tharp. I'll be on hand as well… and The Oxford Club's Options Expert, Karim Rahemtulla, will share with you the secrets behind his profitable Instant Profit System and Options Advantage. For more information, please call Event Director, Vickie Beard, at 888-799-0463 or click here.

Good investing,

Steve