Hi CanadianWhite, welcome to the forum.
The "TL;DR" version of this post is coin collections are very poor investments compared to traditional banking products, IMHO.
The longer version:
I have been collecting Canadian coins now for about 2-3 years, and I consider myself an enthusiast. I enjoy the coins and learning about them, the manufacture and the history. I have purchased some coins that I believe are unlikely to gain much value because they were "fun", but generally I try to buy at a low price and accumulate small gains in value. Determining a "low price" can be as much of a topic as anything else in this hobby, and I'll share some of my experience below. For modern issues book value/trends values can often be very misleading. As an example, if a high grade 1 cent coin is book valued at $30, you might have good odds to pick it up off
ebay for $9-15. $30 represents a full, mature value for a coin that's still easily found on the market or in rolls. How long before it gets to the $30 is anyone's guess, if it ever does. On the other hand, particularly nice, older pieces may command a value above the book value and be a good value at that price. Learning this part of the hobby is an ongoing process and could fill a book (written by someone with much more knowledge than I possess).
In what is likely to be an unpopular opinion, if you are seeking an investment for your children I suggest you consult your financial institution. RESPs, tax sheltered savings accounts and other investments will likely have higher average rates of return than a coin collection will. I have read arguments to this effect elsewhere that contained some research in them, I'm sorry I'm unable to provide you with a link to it, and because of that please take this strictly as my opinion.
A well shopped coin collection can retain its value and can often be no worse than a straight savings account. Some will find "the big score" in newer products, but consider that by the time the knowledge goes public, much of the profit has already been taken. For me finding a value gain in new product means obtaining mint rolls from the bank or supermarket and sorting through to find a few choice coins worth keeping and putting the rest back into circulation. I have not certified these coins, they are stored in 2x2s in a binder. Certifying them would involve expense and if I am not prepared to sell them, that money is better spent adding to the collection. Additionally when I am ready to sell, the reputation of this or that certification company may be good or bad. Why choose now and risk the company falling out of favour, possibly damaging the value of those certifications? I pay face value, put in labour, and can do no worse than face value and a 2x2. As I get better at inspecting coins, the odds of my pulling out high quality grows.
I've used this method for helping me develop grading skills, that are still pretty novice outside of modern effigy mint state coins. As my skills grow I will be able to look at older coins and form my own opinion as to whether a dealer's offering is over graded ( over priced ) or under graded ( under priced ). Sometimes I will be flat out wrong :-) The better I get at it the higher the odds that I will be "buying low". This also ties into the other main area I see for "buying low" which is unattributed varieties. Not all varieties command a premium, but some do. You still can't overpay for the base coin unless you're sure of what you're doing. I have had the privilege of being introduced to a group of fellows who are remarkable at this particular activity.
I have eschewed the
RCM products that are produced strictly as collectables primarily because they often loose value from their offering prices, and don't contain sufficient precious metals to justify their cost. Some of them are absolutely breath taking, but for investment purposes I don't care what it looks like, just what it's worth. Some of the issues will increase in value. The 1911 commemorative set mentioned above tripled in value when some dealers jacked their prices on them, however, if you didn't buy them at the lower issue price you won't realize this gain as (imho) they are unlikely to inflate rapidly beyond this 300% mark.
Specimen and proof sets can be worth more if you rip them apart and piece them out. I frequently see the commemorative loonie or twoonie removed from the set and sold for more than the set itself is valued at (figure that one out at your leisure). Most "plain jane" sets depreciate as dealers end up with shelves full of them that they can't sell. The "uncirculated" sets are particularly bad for this phenomenon. Many of the sets of the '70s and '80s can be purchased for their issue price or less today on
ebay (if you see one, check how many are available, it's often "more than 10"). This year's uncirculated set is an ugly dog made with Winnipeg mint circulation coins. It's probably worth face value and no more, whether you stick the change in a jar or in a pilofilm package makes no difference.
Some of the
RCM products will go up if the mintage is low enough and the general interest high enough. Usually if the subject of the coin is popular enough in the public's eye, it'll catch attention. The Wayne Gretzky coins ought to do well among men in their mid-late 30's and up. The issue prices and mintages are high enough that blindly purchasing the coins to turn a future profit is probably not a great idea.
At the end of the day it becomes about how much work you want to put into your collection and how much learning you want to do. If everyone could reliably turn 6-8% on coin collections, Wall Street would collapse for the derth of people selling stocks to buy coins. For my children, if they are interested in coin collecting I will emphasise the hobby side to them and teach them about preserving value as opposed to investment grade strategy, the fun over the value.
At the same time savings accounts that save me tax dollars today, RESPs that are matched by the government, and so on are my slow but steady way to plan for the future.
Sorry about the length, hope it helps.
Hi and welcome to the forum. First off I would start with circulated buisness strikes, Pennies and nickles ( they are fairly reasonable in price )If the girls are old enough get them started with you as you build their collections. Just keep an eye on your daily change and fill holes with better grades as you get them. You'll have fun seeing the girls reaction to the (new coins in your pocket today dad ).
Posted 10/24/2011 6:33 pm
