Significance of Wealth | Episode 9
Treasures as Investments –
Exploring Shipwreck Coins
and Artifacts with Daniel Sedwick
Discover how shipwreck coins and rare artifacts are creating new opportunities for investors in this insightful episode of The Significance of Wealth podcast with Daniel Sedwick.
Join Tom Ruggie, Founder & CEO of Destiny Family Office, in Episode 9 of The Significance of Wealth podcast as he welcomes Daniel Sedwick, President of Daniel Frank Sedwick Auction House. Daniel is a renowned expert in colonial coinage, shipwreck artifacts, and treasure coins. Together, they explore how rare collectibles can serve as both a passion and a strategic investment.
Episode Highlights
Throughout the episode, Tom and Daniel discuss the significance of provenance and authenticity in driving the value of rare collectibles, the complexities of sourcing shipwreck items, and the evolving auction market. They explore how collectibles are becoming a viable alternative asset class and provide insights into the fascinating world of shipwreck treasures, rare coins, and artifacts. Daniel also shares personal stories from record-breaking auctions, and the two discuss the impact of government regulations on salvaging shipwreck items.
- How shipwreck coins and artifacts are authenticated through provenance.
- The record-breaking auction of Mexican silver and gold coins from historic shipwrecks.
- Why collectibles are increasingly recognized as a legitimate alternative investment class.
- The role of government regulations in the shipwreck salvage process.
Key Takeaways
Why is provenance critical in collecting shipwreck coins and artifacts?
Clear provenance, which refers to the record of an item’s chain of ownership, is vital across nearly all collectible categories. However, it’s particularly critical in shipwreck coin and artifact collecting, an idiosyncratic category in which laws and government regulations can jeopardize clean ownership of an item. Items must come with documented proof of their acquisition through the appropriate channels. Otherwise, their marketability suffers.
As Sedwick explains: “[An item] has to be very clean. There has to be a good paper trail going all the way back to the salvage, showing that it was officially salvaged, it went through proper government channels and divisions, that it’s legal to own, and, most importantly, it is what we say it is.”
The concept of “clean” ownership comes up throughout the conversation, and its importance has only risen in recent years. Sedwick notes that many items collected during an era of more lax standards have been tarnished in reputation because of dubious provenance. The weak “he-said, she-said” provenance of those items found during the scuba diving boom of the ‘60s and ‘70s is no longer acceptable. Even though many of those findings were very likely legitimate, the market won’t recognize them as such because, without the appropriate documentation, participants can’t be certain of their legitimacy.
“The real value today is in having a clean paper trail,” Sedwick explains. “The way that happens is that the legitimate salvage operations are usually under contract with a local government.” By obtaining items from those credentialed operations, collectors embrace a “chain of command and a chain of ownership that’s very well documented, monitored, and policed so that people know it can be trusted.”
Ideally, unique certificates accompany such items, providing serial numbers that collectors can cross-check against a publicly available database.
How can strong provenance and clean ownership drive higher values for shipwreck coins and artifacts?
Sedwick notes that rigorous focus on provenance has driven the market, bringing higher values across the board. He cites an example, the ingots of the Atocha wreck, found by Mel Fisher and his team in the 1980s. Those coins, he says, would normally sell for a few hundred dollars each, but accompanied by the appropriate certification, their value rises to thousands.
How do cultural property claims impact the shipwreck market?
Many governments claim ownership rights to artifacts they deem “cultural property,” possessing material significance to their people. These claims can be murky in shipwreck property, with conflicting opinions about whether the property belongs to the country where the ship originated, where the material was mined, or whose shores host the wreck. Such disputes can frequently give rise to legal cases.
Sedwick notes that there are particular concerns among collectors of ancient coins, who fear that their possessions may be seized and repatriated to a foreign country of origin that claims them as cultural property. These concerns underscore the importance of collecting items that are fully certified and vetted through the appropriate channels, with indisputable provenance.
How has increased investor interest in shipwreck coins impacted the hobby?
According to Sedwick, the category was historically composed primarily of pure collectors, motivated by passion rather than capital appreciation. While there has been an influx of those focused on investment prospects, he notes that collectors can buy with their hearts while ensuring they’re well informed to make intelligent decisions, resulting in positive financial outcomes.
Genuine passion and interest can enable those intelligent decisions, motivating collectors to research the space thoroughly and diligently. That curiosity creates an informational advantage that may not present itself as organically to those operating in the space for investment reasons only. Often, a collector’s pure passion and curiosity for an item will be shared by other collectors, creating additional demand and marketability as interest becomes more prevalent.
Sedwick does note that, fortunately, if there are those entering the space for financial gain, they’re doing so in a safer era than in years past.
He recounts that, in the pre-Internet era, boiler room operations would appear on TV or cold call customers, attempting to sell them on a coin’s rarity and investment potential. “You had to really know what you were doing in order to do well in any kind of investment like that. You certainly couldn’t buy from one of these operations. You would lose your money all the time.” But times have changed, and the greater availability of information and connectivity in the community has enabled market participants to identify and neutralize bad actors.
Sedwick explains: “It’s a different day. You can’t get away with anything like that now.
Everything is so transparent; anything really bad is drummed out very quickly. You have to spend more money, that’s the downside, but you can be a lot more comfortable about it. I think that it’s actually a much safer time to be a collector and an investor.”
There’s so much to learn from this engaging discussion, and we encourage you to listen to the full episode for more of the valuable insights shared above. Among the subjects we haven’t covered here:
- How auction houses source their items, and whether there are still many items coming to market fresh from shipwrecks.
- Why it’s important for credible auction houses to reject a significant amount of potential consigned material.
- The treasures that surface at auction from the famous Titanic shipwreck.
- The story of a gold coin worth more than $1 million.
The expressed views, thoughts, and opinions belong solely to the host and/or guests and are not investment recommendations or opinions issued by Destiny Wealth Partners or its affiliates. Investment advisory services are offered through Destiny Wealth Partners, LLC, an SEC Registered Investment Advisor. Destiny Wealth Partners also conducts business under the name Destiny Family Office. Destiny Family Office podcasts are the sole property of Destiny Family Office, and information provided is for informational and educational purposes only. Destiny Family Office and its affiliates are not responsible for any human or mechanical errors or omissions. Parties may not reproduce these podcasts in any form without the express written consent of Destiny Family Office. Learn more at https://destinyfamilyoffice.com/disclosures/