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 Replies: 46 / Views: 3,984 |
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Rest in Peace
United States
9104 Posts |
If you invested $181,088.48 in May 89 (long after silver and gold prices went down from their peak) in a market basket of slobbed coins, they would be worth $72,906.89 today, and that's the highest price in 15 years. An investment that loses 60% in 20 years is not my idea of a bargain. (source: PCGS)
A major investment house used to claim compounded growth rates of around 30% a year for coin investments. If it really worked that way, I would have liquidated my assets and bought $100,000 in coins in 1980. Since 2000, I could sell $5 million a year and still have $25 million left.
Buy what you like, and pay what it's worth for enjoyment. Then when you sell, whatever it brings is pure profit.
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Bedrock of the Community
United States
20753 Posts |
Here is one way of looking at anything you invest in. If you need money tomorrow, is your investment flexible enough that you could acquire the necessary money in time?
If you buy stocks, cars, coins, Gold or Silver, Diamonds, etc. can you liquidate them for cash fast? Can you use any of them at a bank for collateral for a loan?
Unless your wealthy enough not to ever worry about the necessity of cash or money of any kind NOW, keep away from hobby type investments.
Remember the Beanie Babies?
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Pillar of the Community
Australia
1040 Posts |
You could go a similar route, and invest in banknotes. I may be off base here, but in Australia, banknotes out perform virtually all other forms of investment. Coins do well also, but you do have to spend big money. For coins you are looking at keys and most high grade George V coins. For banknotes, there are lots of areas you could look into, pre decimal, star notes, 1st and last prefix, specimen etc. etc.
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Valued Member
 United States
369 Posts |
I'm trying to get over a wierd cold, so I haven't been thinking about coins much for the past few days. But thanks for all of the great advice everyone.
I like that last line from biggfredd: " Buy what you like, and pay what it's worth for enjoyment. Then when you sell, whatever it brings is pure profit."
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New Member
United States
12 Posts |
There are too many ways for inexperienced people to lose money in coins.
- You could pay too much when you buy a coin
- You could get less than full value when you sell a coin
- You could pay a 65 price for a 65 slab, but the coin is a 64
- You could pay a 65 price for a 65 slab with a 65 coin, but it's low-end for the grade and no one wants to pay what you are asking.
- You could pay a 65 price for a 65 slab with a solid 65 coin, but the market goes down when you need to sell.
Only the last item is totally beyond your control - the others can be avoided by experience and knowledge. The people who are new to coins are the ones who fall victim to the first four. That's why people who are new to coins should not invest in them.
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Pillar of the Community
United States
5318 Posts |
Quote:
You could go a similar route, and invest in banknotes. I may be off base here, but in Australia, banknotes out perform virtually all other forms of investment. This is very interesting. Would those be sterling-based notes, or newer polymer notes? Here in the states, coins have always gotten better visibility, but perhaps notes are poised to take off?  (not investment advice in any way. I feel that many collector items have been pushed up perhaps beyond long term trends, particularly some US coin series.) |
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Rest in Peace
United States
9104 Posts |
Rule #1: If it comes with a certificate of authenticity, run.
It amazes me that people trust a COA. If someone can counterfeit a coin, baseball card, or whatever, don't you think they can fake a piece of paper?
Rule #2: If it's sold via some sort of national advertising, you can bet it's overpriced.
If it's new, someone has to pay for those ads that may cost $10,000 or more each. If it's used, they have to get tens of thousands of them to justify a big promotion. If there are that many available, they are by definition common, even if you've never seen them before.
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Rest in Peace
United States
9104 Posts |
Quote:
- You could pay too much when you buy a coin
- You could get less than full value when you sell a coin
- You could pay a 65 price for a 65 slab, but the coin is a 64
- You could pay a 65 price for a 65 slab with a 65 coin, but it's low-end for the grade and no one wants to pay what you are asking.
- You could pay a 65 price for a 65 slab with a solid 65 coin, but the market goes down when you need to sell.
Only the last item is totally beyond your control - the others can be avoided by experience and knowledge. The others can be avoided by learning what you're doing, instead of buying slobbed coins. |
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Moderator
 Australia
16850 Posts |
Quote:Quote:
You could go a similar route, and invest in banknotes. I may be off base here, but in Australia, banknotes out perform virtually all other forms of investment. This is very interesting. Would those be sterling-based notes, or newer polymer notes? That's mainly for older issues: early decimal (1960's) in pristine condition and notes in just about any condition from pre-WWII. The modern notes, especially the made-for-collectors commemoratives and special issues, perform as well as any other contrived rarity: usually, very poorly. Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Moderator
United States
16679 Posts |
I think Prethen was right on. You cannot go wrong with certified keys. I have done quite well with these. There is really no downside in my opinion. Collector grades (G-VF).
swcoin.ecrater.com
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Bedrock of the Community
United States
20753 Posts |
As you can see about your original question. Basically the answer is NO. Most hobbies are just habbies and should never be thought of as an investment. Many people do make a lot of money with coins as dealers. However, that too is chancy since you have to have a decent amount of stock, a web site, coin store, coin shows or all of these. And even then, no guarantees.
At one coin show I go to there is an elderly coupld that sells at one or two shows a month. They are retired though and basically only have Social Security coming in. HOWEVER, their coin sales are way better than that so they are doing great. The funny thing is what they sell. They go to banks where they are known and buy rolls of new coins. They also purchase lots of 2x2's. Also, they send in to the Mint for proof sets and split them all up and each go into a 2x2. The rolls of coins are opened and all go into 2x2's as Brilliant Uncircs. And basically that is all they sell with a few exceptions if they run accross anything great. They have one of the busiest tables at the coin shows where I've seen them.
Another dealer I've talked to at these coin shows tells me he only sells coins when he finds them at a garage/yard sale or flea market for unusually low prices. Another gimmick of his is to buy large so called bags of unsearched Lincoln Wheat Cents. He doesn't even look through them. He just puts them out on his table in little bags of 100 for $3.
In other words, YES, there is a chance to make money on coins. Yes they could be a good investment. But for every success story there are a lot more failures.
For investing watch TV. There are always people there telling you to buy properties for no money down and resell for a fantastic profit. Naturally they are only telling you how because they like you so much.
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Pillar of the Community
United States
5318 Posts |
 And from what I've heard from a few dealer friends--many "dealers" are just scraping by because they have $$$ devoted to inventory which sells very slowly. They've basically piddled their life savings away on mediocre coins which slowly corrode in boxes of 2X2s. I tend to believe this is an unquestioned, "old school" and broken business model, but I digress here, lol. Quote:
Most hobbies are just hobbies and should never be thought of as an investment. That is certainly true if one amasses coins in the typical US collector fashion. In the worst possible scenario, this means buying buckets of hypermarketed, relatively common stuff from grifters like "Coin Vault." To a lesser degree, many overhyped even slabbed series more reflect a business margin than lasting, fundamental collector value. (IMO) I find "coin investor" advice from anyone involved on the sales/marketing end of Numismatics highly suspect. That's like asking a realtor if you should pay the highest possible price on a house. And, I doubt anyone will be successful "investing" as a hobby of volume—but that's what the business wants you to believe. However, there are many other ways to "collect." One approach could be to pick a focus and spend maybe $100 on a few good books detailing keys/varieties/rarities of a country or series. Learn to spot just a few coins you want, and go to a show. If you find something, great; if not, walk away--you've just learned something. I've personally found that persistence pays off, an eye for detail is rewarded, and healthy skepticism is your protector. So I basically only look for coins of overlooked value, and my work has paid off. It's nowhere near to support me, LOL...but I've basically broke even on my hobby. And, when I find a good deal, I can often pass some coins on to other collectors--at far below CV. It's good for me, good for other collectors, and I (hope) for the hobby. I even attribute coins for dealers whom I trust and offer me deals--good will breeds more of the same.  Man, what a long post...I don't write this with any water-tight certainty; I only do this because I enjoy "the hunt" Good luck (and fun) to all!  Edited by KurtS
08/31/2008 5:55 pm
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Pillar of the Community
United States
1208 Posts |
Here is a good thread, started by a journalist investigating coins as an investment for his clients. https://goccf.com/t/29089I stand by what I said: Quote:
I have been collecting since childhood...
About 30 years now, and unless you really
know what the H-E-double-L you are doing,
you will lose.
If this was a great investment, you'd think after
30 years I'd be rich!
I've won some overwhelmingly, but have lost the same
or more overwhelmingly.
Personally, I don't think this is an investor's area
unless it is based on precious metals speculation.
Besides, we don't want investors coming into our hobby
and messing with it up like they did the real estate market!
Anyway, the time to buy coins is when precious metals are
down, not up. |
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Pillar of the Community
United States
5318 Posts |
Quote:
Besides, we don't want investors coming into our hobby
and messing with it up like they did the real estate market! Yet, I suspect they already have. I tend to believe that every collector venue has seen excessive liquidity pumped into it by those wannabe investors. Why does anyone suppose TPGs ramped up so quickly, and the burgeoning hordes of "investors" who pay top dollar for a slab without understanding the coin? I suspect this is also why forgeries are taken off recently--people who jumped on the "investor-collector" bandwagon are easy prey. But that's just my free, inexpert opinion and it's worth all that I charge, lol. I just suspect there are some glaring holes of logic behind Numismatics, where we'll see a retracing to fundamentals if disposable incomes evaporate. But who knows...I'll quickly kick my opinion to the gutter when a better idea presents itself. Have fun--not "getting rich". Edited by KurtS
08/31/2008 6:30 pm
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Rest in Peace
United States
9104 Posts |
Quote:
Another gimmick of his is to buy large so called bags of unsearched Lincoln Wheat Cents. He doesn't even look through them. He just puts them out on his table in little bags of 100 for $3. Sounds like a lot of effort when he could sell them as bags on ebay for $250 (100 for $5). |
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Replies: 46 / Views: 3,984 |
First Page
Posted 08/22/2008 7:54 pm
