Investments?

allranger, thanks for asking :) First of all as you might have noticed, I'm Egyptian but I do live in Saudi Arabia. Yes you are right, Saudi is a very wealthy country, but at the same time, most of the people here are ignorant of many civilized ways and hobbies. I mean they have the money to buy Ferrari's and Lambo's but they won't appreciate the engineering. Get what I mean? Many are like this here but many others are well educated and much more civilized. I live in a city called Taif, if you want to google it. This is probably the city where all nomads and Bedouins originated from. Most of the Saudis here don't appreciate things like hobbies, except soccer or doing crazy stunts with expensive cars, let alone collecting coins. As a result, Not much interest is paid to coin collectors or anything related to that. I live in a compound of about 500 people at least, and I think I'm one of 5 that collect coins :P I'm the odd one out. There are other cities which are much more civilized. Such as Jeddah it lies on the coast of the Red Sea and has a large population of many nationalities and different backgrounds from all over the world. You can find specific coin shops there, but yet a few of them only. About American coinage,I love them. I love how they look and how they are organized. And I love their legacies too. They aren't found here at all and so I have to buy them online. Which as you might figure out, REALLY EXPENSIVE. Anyway that is it I hope this long reply answers you. Sorry if I went a few times off topic :P Also thanks for asking. I like that we can share our backgrounds and cultures over here :)

Haha I like that David :P

As many others in this thread have already stated, coins are a terrible "investment". Technically, they aren't even "investments", unlike things such as stock market shares, or property, or government bonds - coins don't earn you any extra income or pay dividends while you own them. What people do with coins, as well as bullion, antiques, etc is more properly termed "speculation". And speculation is inherently more risky than investment, since you are basically gambling that the price you obtain when you wish to sell will be higher than what you paid.

That being said, the best coins to "speculate in" are probably the ones that have very long track records of being good coins to speculate in: the famous rarities, such as American 1909-S-VBD cents or 1916-D Mercury dimes, or Australian 1930 pennies. Such items tend to ride out the ups and downs of the coin market much better than the lesser-known items. The downside to such speculation is that the prices are already high: it costs a lot of money to buy just one coin. For people on a limited budget, such objects are simply out of the question. You also have to be more careful of buying fakes.

Next-best is the old mantra "buy in the best condition you can afford". People always pay more for high-grade coins than low-grade, and this trend is getting more and more pronounced over time. Try to find coins that are high-grade, old, and that you can still afford.

Finally, as far as the vast quantities of modern coins being churned out by the mints of the world today, it really can be tricky to try to pick the one or two that prove exceptionally popular. Two Australian examples that come to mind are the Victoria Cross dollar 2000 and the Perth Mint 2006 "redback" silver dollar issued in the name of Tuvalu. Though down slightly from their peaks, both still sell for well over ten times their issue price. Nobody, certainly not the Mints or the coin dealers, predicted they would prove so popular. In hindsight, one could say that the VC dollar combined an excellent design with a commemoration of something nationally significant that appealed to many people, not just coin collectors. But I still can't explain the "redback" phenomenon.

It is really hard to choose a series or a particular coin that will increase in value over time. Most collectors will tell you to buy the coin you like and if the value increases then that is all well and good, but if it loses value you still enjoyed the ownership and being able to look at the coin anytime you wanted. The only information an investor will give you is to buy low and sell high, this is very vague as no one knows what the lowest low will be nor do they know what the highest high will be. This is something the person wanting to invest will have to look around and find a specific type of coin they are interested in and then do some research to see how they have fared in the past. I remember when I was buying Silver coins and bars when it was 5 and 6 dollars an ounce and everyone told me I was wasting my money and time as history has shown I could hold onto the items for 30 years and not make a penny. They were actually correct but I was buying them because I just wanted them and liked them, I was able to sell most of them for a pretty nice profit when silver hit 40+ dollars an ounce but there were people that purchased silver in the 80's at 40 and 50 dollars an ounce that held onto their silver for 30+ years ad either broke even or lost money when they sold even at the price I sold at. So for them it was a bad 30+ year investment where for me the 7 year investment did pretty well. It all goes back to the buy low and sell high thing I mentioned above. What made it good for me was I didn't care if the items value ever raised, I enjoyed the items when I purchased them and wasn't really doing it as an investment even though it turned out to be a pretty good one in the end

Hasn't the stock market Provence to do better over time than coins?

Gentlemen, this has become a very interesting thread. I liked hearing the stories of everyone. And it does turn out that you can really invest in coins and that it pays off in the end. What I came up with is that most of the replies either encouraged investing in coins and/or investing in the stock market. The negative part about coin investment is that, it will be very expensive to buy the Good coins for investment as they are rare and expensive. And as for stocks, it is really unreliable at all because one day its really up and the other day its downhill. And that is what some replies said. A story about this, I was once in a cab so the cab driver was talking on the phone and after the call was over he tells me that he just lost 600,000 Saudi Riyals which is about $175,000. And that he is working just as a taxi driver right now. I heard many similar stories of that kind too. It is a tough subject and I think for it to success you need to have a really good luck and the brains.

The more I think about this question the more I come to one conclusion, the only coins that are really a surfire investment are the coins that are so rare we would have to pool all of our money together to even have a shot at buying them.

That said metals can be an investment but you have no control over what the price will do and there are active traders whose best interest is to keep silver prices down who can and do keep it low.

But in a way they are kind of an investment anyway. Not in the making money sense but the it will always have some value sense. You can lose every last penny is true investments, that is not the case with coins. Even if the money system fell apart and bills had no value silver coins could still be used for trade just like they have been for thousands of years. So in a way they are a doomsday backup plan.

The other way to look at it is like guns they will always have some value. If you decide to stop eating out and used the saved money for coins you are actually investing by turning that money into something that will at least retain value as opposed to spending it on a 1 time thing. Theres so many things we spend money on that we dont really need that its gone for ever and if collection makes you turn some of that money into coins instead of needless things you have made yourself better off than before which to me is an investment.

Or if you wanted to pass the coins down in the family you are investing in future generations. Maybe not investing for yourself but one day these coins will be looked at the same way as the old coins of today. Imagine if you had inherited a complete collection of high end morgans for example how much those are worth today over their price at the time.