Is Buying 20 War Nickels A Good Investment

Like Fashion every series have at time goes through a trend, if you could recognize when to buy and sell! Where's the Crystal Ball!!

I would tend to agree with this statement for the most part, however, certain economic cycles make PMs(precious metals) more desirable which in turn proportionally elevates PM-containing coins.

This elevation in coin pricing can sometimes be magnified if a run on PMs occurs resulting from an unexpected tumultuous world event...

Yes - Completely Agree. For coins that contain precious metal (silver, gold), large increases in the underlying value of these commodities will result in a correlated increase in the value of the coins. This has been historically seen several times throughout history (the famous "silver run" of the very late 1970s caused by the Hunt Brothers, etc.). In some cases, this has even resulted in large runs of people "selling coins for melt", which is why the coin production numbers and the surviving population numbers can often be so widely dispersed.

However, I would posit that if your goal is to simply invest in precious metals, then there are better ways to do that then through coins. You can purchase mutual funds, investment indices, pure bullion, or other types of investment vehicles that are more more directly tied to precious metals value then through coins - although I would caution anyone from ever investing more then perhaps a few percent of their total investable assets in a single sector such as precious metals.

But agree that there is definitely an underlying "precious metal component" that is included in the value of silver, gold, (and now platinum) coins. In fact, I would argue that for many of the "modern issues" such as ASEs or even Silver Mint Sets that have huge populations, that is the primary component of their value anyway - it certainly isn't based on rarity!

Also remember that coins do not benefit from the same tax treatment as other types of investments, so any "gains" in coins will be "less tax efficient" then some other types of investment assets. And the "buy/sell" spread on coins is exceptionally large compared with other types of investments. For example, the buy/sell spread on a coin can be 10% to 20% or even higher.. whereas the bid/ask spread on a mutual fund will be a fraction of a percent, and for an ETF, will be close to zero. And many lower value coins are highly illiquid.. I have dozens and dozens of Jeffersons, LWCs, and Roosevelts that I purchased that I can't sell to dealers at close to anything near what I purchased them for.. many won't even take them at all...

Again, nothing here is to discourage anyone from trying to make some money buying/selling coins.. and I am sure it can be done and happens.. my only comment is that for the "casual collector" or "hobbiest" such as myself, it is definitely not a very likely scenario and shouldn't be the goal.

And I would never recommend to anyone to invest solely (or even heavily) in coins (or any "collectible" for that matter) in place of a a well-diversified investment portfolio.

Regards,

Michael

The truth is that nobody knows. Silver prices could double or triple and you would do great. Or they could go down and you could lose money. Most likely they won't fluctuate much in price over the long term and therefore there are better investments.

I buy whatever I like and due to space constraints, I house my collections in dansco albums. I often crack coins out of holders and place them in albums even though I know the coin is worth more in the slab. However I can not enjoy the coin in a slab as much as an album. I had a full set of graded proof nickels, didn't enjoy rattling through slabs every time I wanted to see them. So consequently I didn't look at them much. In a dansco album I can enjoy the coins much better and look through a full collection which I often do.

I am working on a 7070 type set now and know I will be cracking out some $300 - $600 coins. Some people would think that's crazy but it's the way I enjoy my collection.

Another fact to look at is the refinement cost if you purchase them for silver content. The cost of refining a 35% coin to .999 is going to be higher than refining 90% due to increased difficulty.