Are There Any Coin "Investors" Here?

For me it is a passion and a hobby, but after over thirty years I still cannot consider that an added bonus. My collection's only value is sentimental. This does not apply to everyone, I know, but it does apply to me.

ChesapeakeSmitty

You cant equate the investment potential of stocks & commodities with coins. Both are far more liquid and the acquisition & disposition costs are far less. Quality stocks are also way more accessible than quality coins and some stocks pay a dividend. As both an active coin collector and market investor I can tell you that it's far easier making money in stocks.

I also believe that the modern condition rarity emperor's new clothes scheme will eventually come crashing down. TPG ratings are actually subjective and do the subtle differences between MS67 and 69 really make a difference?

I collect because I like the chase, I'm fascinated by how rare some of these items are, and I appreciate the historical significance. If I make some money or don't lose too much at the end of it all that would be a bonus. If I wanted to make money doing this I'd become a dealer.

Because,

Maybe I can give a little insight into why I'm researching coins as an investment option.

Without getting into all the details of my economic reasoning, let me just say that I don't believe the economy is in a secular recovery.

With the US adding 1% to debt/GDP ratio per month (currently at 101%), a financial "episode" isn't too far around the corner. Non-discretionary expenses are 86% of tax revenue and there are no non-discretionary cuts in sight. That means there WILL be massive deficits for quite a while. Once the Fed can't keep interest rates down any longer the game is over. We'll either go into a deflation then inflation period, or straight to inflation. Given that, I look to my long-term investments to survive and prosper during that experience while keeping my short-term investments on a short leash.

During the last bout of high inflation in the late 1970's coins did well. Stocks took a header. Cumulative inflation from 1974-1981 was 101%. But stocks were flat, which means, inflation-adjusted, they lost approximately 50%. Coins also seem to be less volatile and require less maintenance than stocks. That is the principle reason I'm looking at diversifying just a small portion (probably +or-5%) of my portfolio to them.

So my goal is three-fold. Diversify into more hard assets. Figure out which stocks to short before the turning point. And figure out what the next Fed-created bubble is going to be.

I freely admit that my opinion is biased by the fact that my collection is worth less than most used cars. And I am talking about those old "questionable" cars sold by the shady man on the corner lot that used to be service station, not the nicer, certified, and "gently" used cars sold at a dealership.

I was watching American Idol.

I can relate to what ChesapeakeSmitty is saying, I was going through that fork road when I started investing into coins 10+ years ago, the internet was booming for about a year or two, but there weren't forums like this or very little coin sites available, information were provided by numismatic periodicals, word of mouth from dealers.

Friends thinks that gold was going to continue to decline and not a sound investment when I thought gold was under $275 an oz. it is time to get in, a dealer offer to sell me some investment grade gold coins that turn out it wasn't so sound at all for many years, rarity isn't what's the number one reason that prices will go up in time, but demand. I am glad to say that I bought more gold bullion and the so call investment grade coin at the ratio of 50/50 to balance the scale.

Otherwise, I am not sure if I ever see my investment coming back to me maybe for another 10 years?

That's good. Honestly though if I were going to be buying coins for investments then I still would continue to purchase PMs like raw gold and silver eagles. That is just my opinion and what I prefer to do though. If you do end up buying investment coins then just remember the old saying to buy the coin and not the slab. Eye appeal is what will get your money back or at least recover some of it should the demand for that coin collapse. Just my opinion though.

, Because!