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During the next recession, will classic coins go up or down in value?  
 

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Pillar of the Community
United States
1560 Posts
 Posted 08/12/2017  8:25 pm Show Profile   Bookmark this topic Add MikeF to your friends list Get a Link to this Message
Poll Question
We are definitely due for a recession. I feel this expansion cycle has just about run its course. I understand coins are heavily correlated to prices of precious metals, but I wasn't actively collecting during the last downturn.

So what ye thinks?


Poll Choices
  Classic collectible coins will increase in value
  Classic collectible coins will decrease in value

    Anonymous Vote
Hi, my name is MikeF and I suffer from Seated dollar fever. Starting a twelve step program next week.
Edited by MikeF
08/12/2017 8:43 pm
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Canada
1414 Posts
 Posted 08/12/2017  9:35 pm  Show Profile   Check silverwolf's eBay Listings Bookmark this reply Add silverwolf to your friends list Get a Link to this Reply
isn't he usa already in a long winded recession, ..not counting the dow index?
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 Posted 08/12/2017  9:40 pm  Show Profile   Check edweather's eBay Listings Bookmark this reply Add edweather to your friends list Get a Link to this Reply
I vote with the caveat, more common stuff will depreciate, unless silver spikes, but the valuable stuff will generally continue upward. Stocks will definitely be cheaper, and a better investment
Edited by edweather
08/12/2017 9:41 pm
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United States
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 Posted 08/12/2017  9:41 pm  Show Profile   Bookmark this reply Add MikeF to your friends list Get a Link to this Reply
No, gdp has been expanding since 2010. That is if you trust the government's numbers. We had a couple dips but a recession is defined by 3 quarters of negative gdp growth.
Hi, my name is MikeF and I suffer from Seated dollar fever. Starting a twelve step program next week.
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 Posted 08/12/2017  10:32 pm  Show Profile   Bookmark this reply Add paralyse to your friends list Get a Link to this Reply
Political unrest (Venezuela, North Korea, Russia) is good for precious metals markets. The Dow is on a record bull run, and the bears are eventually going to come out of hibernation, particularly if the Fed finally gets around to raising interest rates off the floor.

I also think that we will see growth in the relative value of cash and liquid assets as an aging Boomer generation continues selling out and cashing in their Roths and 401(k)'s in favor of cash dividend funds and other investment options that allow for both asset growth and bank-like withdrawal and deposit of funds. The same exodus of funds from the stock market will flow back into dividend-bearing muni bonds as well as being used to satisfy debts such as paying off mortgages and revolving lines of credit; cash will regain some ground against the credit market as the cost of healthcare and elderly care services continue to skyrocket.

I think the market is long overdue for a correction, but I don't see a recession anytime soon, not with low unemployment, high productivity, low inflation, and wage growth; the US economy as a whole has been in an expansionary cycle for over 5 years and we're still on the upward slope of the cyclical; perhaps nearing the crest, but far removed from the trough of 2008-2009.

As related to the market for rare coins. The decline of interest in coin collecting as a hobby across some older demographics is only partially offset by limited growth in younger age groups. In addition, new investors with deep pockets have been entering the numismatic market for the last 10-15 years with an eye towards capturing some of the greatest rarities in US coins and holding them as hedges against inflation and stores of value. To the "average" collector, this means a tight supply with rising prices for historically desirable investment-grade coins, but flat or falling prices for low-grade type coins, which is the mode the coin market has been in really for several years. If you want to approach the market as an investor, it is worthwhile to consider divesting your "underperforming assets" -- even if this means taking a loss -- and reinvesting your funds into key date rarities and market bellwethers such as the early gold and copper issues. The early gold and early copper markets have both been on a tear, especially when compared to "baseline" silver coin series such as type Morgan dollars.

Just my Two Cent Piece's worth...AB
Member ANA - EAC - TNA - SSDC
Specializing in 1932-1964 Washington quarters

"Most of the things worth doing in the world had been declared impossible before they were done." -- Louis D. Brandeis
Edited by paralyse
08/12/2017 11:18 pm
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 Posted 08/13/2017  12:15 am  Show Profile   Check spruett001's eBay Listings Bookmark this reply Add spruett001 to your friends list Get a Link to this Reply
Yeah, what he said.

I'm not an economist but I don't see the market being flooded with classic coins during a recession. They will be stashed and trading of them will decrease. Those that would be for sale will consequently have higher prices.
"When you make the finding yourself - even if you're the last person on Earth to see the light - you'll never forget it."
-Carl Sagan

My Want List: http://goccf.com/t/282022
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 Posted 08/13/2017  01:02 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply
I am not sure myself, but that is an interesting analysis, paralyse. I think I will just stay my current course and see where I land.
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 Posted 08/13/2017  01:40 am  Show Profile   Check TNG's eBay Listings Bookmark this reply Add TNG to your friends list Get a Link to this Reply
After more than 40 years of collecting, I finally don't give a hoot about economics anymore.
I do know that if I have to sell anything, I am sure it will be the wrong time to sell. Murphy's law.

If I would vote up there and post my vote choice, you can bet that the direct opposite is what will happen. So I am not going to vote on this one.

I stick with my rule, keep the best and sell the rest and I'll probably do OK.
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Australia
13275 Posts
 Posted 08/13/2017  02:29 am  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
With my experience of 50 years or more of collecting and studying coins,
I have to agree with the observation that the value of rare coins IS loosely tied to the value of gold and silver.
Bullion prices have a tendency to run counter cyclical to the health of the economy. That is my observation, anyway.

An economic recession does not necessarily mean inflation or a devaluation of the dollar. They may or may NOT be related, depending on the economic conditions.

If the dollar looses value then gold can be good hedge and quite often in these conditions, so can investment in rare coins.

I am not a numismatic investor, I am a collector, and so I don't really care if the value of my collection goes up or down relative to other investments.
My collection DOES however, have significant value of the order of 10's of thousands dollars.
Edited by sel_69l
08/13/2017 03:08 am
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 Posted 08/13/2017  09:52 am  Show Profile   Bookmark this reply Add moxking to your friends list Get a Link to this Reply
I maintain a want list of between 50-60 coins, all of which are specific to helping me accomplish one or more goals.

As an example, I've had 1934 D and S Walkers on my want list for several years. Keep in mind that regardless of the time I have to wait I'm looking for strong strikes, blazing white (since its nearly impossible to find nicely toned Walkers) and spectacular eye appeal. I've seen plenty of plain Jane's for those two, and I've even bid on ones that were exactly what I wanted. Each time I've been beaten to death, and I've had to raise my acceptable price several times in hopes of landing those two.

The assumption that coins are worth a particular amount in a specific grade is ludicrous for higher value items. The vast majority of collectors entering our collecting genre look for a list of what a coin should be worth and believe there is some price list somewhere that will be best to answer those value specifications.

On this forum the most likely recommendation those folks receive is eBay past sales. That might help for relatively common coins, but doesn't help anyone looking for better coins, as they sell rarely on eBay.

Heritage, Stacks, and Great Collections are the best sources for past sales on virtually any coin. The "problem" is that when you review past sales for a particular coin in a particular grade the results may vary hundreds of percent for the same coin in the "same" grade by the same TPG.

Coins should be considered unique rather than one of many as that attitude helps you evaluate each coin as a single example.

What is true today is that really beautiful coins are always tough to find and will likely sell in an appropriate venue for more money.

From my own want list I can tell you that none of what I want are doing anything but increasing in price as time goes by. Those who believe the sky is falling for the number of collectors participating in our hobby is relying on a second assumption that's just plain wrong.

The value of coins depends on the available purchasing power for coins much more than the number of collectors.

Nice quality coins are tough to find and are stable or increasing in value.
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 Posted 08/13/2017  10:54 am  Show Profile   Bookmark this reply Add chesterb to your friends list Get a Link to this Reply
Q. David Bowers analyzed this question in his book " United States coins by Design Type - An Action Guide...." it's a long title. Anyway, in most cases the rare coin market increased during bear markets and downturns in the economy but there were a few times like in 1990 when they both did poorly.

Some segments did very well during some bear markets. Like in 2002/2003, ultra high grade rarities and modern coins excelled during that time.

Looking at my own collection it was interesting that I sat out and did not purchase many, if any, coins during the last few downturns in the economy. This was unintentional but just interesting to note for myself.

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 Posted 08/13/2017  2:25 pm  Show Profile   Bookmark this reply Add terry8835 to your friends list Get a Link to this Reply
I think coins might increase in a "economic panic" but would fall in a long recession/depression. If the wind just goes out of the economy people will not be worried about buying coins , but with keeping their jobs, cars and houses. However, this would be the time to buy coins. Buy low and sell high unless we are in a long term unwinding of coin prices due to demographic reasons and just a lack of interest. I have experienced that certain 20th century silver coins are falling value right now meaning the Peace dollar. Look at prices last year and prices today. It is hard to buy when coin prices seem to be falling or going nowhere but I think this is the time to buy. Stick to silver and gold coins of higher quality IMO.
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 Posted 08/13/2017  2:56 pm  Show Profile   Bookmark this reply Add paxbrit to your friends list Get a Link to this Reply
I have to agree with Terry8835, the population of buyers for coins is going to decrease, not increase, when times get tough for the nation. The remaining buyers are going to be looking for top-quality rarities and outstanding mid-level coins. If you have some of those to sell, you'll probably make some money, but a collection of Jefferson nickels or Ike dollars in MS63 is going to gather dust.
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 Posted 08/13/2017  5:44 pm  Show Profile   Bookmark this reply Add terry8835 to your friends list Get a Link to this Reply
Paxbrit


Non-silver coins from the last 60 years regardless of condition are going to be flat IMO. Silver and gold classic coins in fine to mint condition may increase but I wonder if I will be alive to see it? If I can just manage to live to be 110 years of age I think I will have it made. I will have my gold coins melted down for dentures.
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 Posted 08/13/2017  6:53 pm  Show Profile   Bookmark this reply Add paralyse to your friends list Get a Link to this Reply
The problem with coins-as-investments is that the health of any investment depends on bringing new money into the market. If the influx of speculators and investors that has poured into the hobby in the last 20 years slows down or is stopped, prices must fall; the same if those investors decide to sell off the next time the market is up.

For the numismatic market to be sustainable, you need buyers at both the bottom and the top, and right now, the market is heavily biased towards the top. In other words, while putting together a set of AU-MS silver coins in a given series (say, Walkers or Morgan dollars) is a noble goal for a collector, such collectors might find themselves trapped: their coins are not scarce enough or valuable enough, other than the key dates, to attract investors, but they are priced out of reach of the middle of the market, for whom putting together a date set of VG-F Morgans is more in line, or the bottom of the market, for whom owning one or two Morgan dollars is the goal, or who will work on circulated Jeffersons or Washingtons or other modern coin issues.

Realistically, everyone wants prices to be low when they're expanding their collection, and prices to be high when they're shrinking it.

If you look at the sports card market, you can see an ominous warning of what happens when a combination of a changing and aging demographic, a market invasion by speculators, and collusion by third-party graders drives out collectors - a relatively stable market transitions to a roller-coaster ride full of bubbles and bursts, and then the bubbles stop coming and prices go flat. Third-party graders have redefined the market along their terms, devastating the prices of raw cards by making them unattractive to the speculators and investors who took over the market. Only the classic scarcities such as the T206 Wagner and the cards of luminaries such as Ruth, Gehrig, DiMaggio and Mantle have been able to maintain a stable and active market in their ownership.

The main thing that worries me about the coin market is not the risk of falling prices or a flat market, it's the fear that we won't have any more bubbles to offset those things.
Member ANA - EAC - TNA - SSDC
Specializing in 1932-1964 Washington quarters

"Most of the things worth doing in the world had been declared impossible before they were done." -- Louis D. Brandeis
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 Posted 08/13/2017  8:46 pm  Show Profile   Check TNG's eBay Listings Bookmark this reply Add TNG to your friends list Get a Link to this Reply
The kids need to be interested in coins too. If there are no buyers and us older folks fade away, who will want coins? So the young numismatists are one of our best investments. Help keep the hobby alive and teach the kids about coins.
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