| Author |
 Replies: 44 / Views: 4,419 |
|
New Member
United States
10 Posts |
Yes, I know - "Coins are a bad investment." And yes, I know that most hope their coins go up in value. And I'm talking about "numismatic" coins, not bullion. Now that we have that out of the way  . For those who consider investment purposes a large consideration in their coin collecting hobby ... tell me about your methodology, your thoughts on any particular coins, your investment literature, etc. Even though I started collecting coins 40 years ago (I still have my originals in their Littleton packaging) and I buy my nephews slabbed coins for holidays, I was never really bitten by the "bug". So, looking for diversification of a small part of my portfolio for long-term investment, I was drawn to investigate coins in more detail. Let me first say that I'm a very experienced investor when it comes to securities and commodities. So I know that research and knowledge is vitally important. I also know not to trust so-called "experts" opinions until verified. And I already have, and know a great deal about "bullion". But I'm far from an expert on numismatic coins. I've already read Travers and Ganz, and am currently reading a couple of Bowers' books. I know all about the grading companies and their standing (I've decided to buy only PCGS in most cases). I know about "key" dates. I know about being "scarce" or having "condition" rarity versus having a low mintage. I know not to follow historical charts without looking at causation (such as the investment banks entering coin investing in the late 80's causing a spike in prices). I've acquired Blue Books at three year intervals to track trends. I've also checked out a couple of Web sites that do the same. I have accounts at Heritage, Lawrence and Teletrade to check out auction results, and maybe bid when the time is right. So far I've only dipped my toes in the water by buying a 1927-S Standing Liberty 25¢ and a 1982-D Washington commemorative 50¢ in MS-69. I'm not going to spend any significant amount until I know what I'm doing. Or I might decide that coins really are a bad investment. Who knows. All that said. What are your thoughts? Thanks |
|
|
|
New Member
Canada
7 Posts |
Hi, I've been collecting in the Canadian market for 20 years as a hobbyist. Whie that aspect of collecting is fun, as I see it there r several headwinds to collecting as an investment (although some may be unique to Canadian coins). In no particular order.
The market is small, therefore poor liquidity. This is even worse for high value coins.
Acquisition costs are high. Taxes, auction fees, dealer profit margins etc.
Selling fees high.
Prices not established especially for rare high value items .
The market is fickle and drivers of coin prices may be faddish. Eg exorbitant premiums for condition may disappear in the future.
Counterfeit quality is improving.
Far fewer children collect now than they did 40 years ago. Successive generations of collectors will probably be smaller.
As for myself I tend to look for "truly" rare or potentially rare coins that are presently overlooked in the market. If all goes well and demand increases there will be a price spike for that item. For example I picked up a large beads Canadian '65 nickel for $300 now worth several thousand, a 2000p quarter for $750 now worth 12k plus, bank of Canada specimen auction items etc.
Despite several successes however the profits generated are insignificant when compared with more conventional approaches to investing. Good luck!
|
|
New Member
 United States
10 Posts |
"As for myself I tend to look for "truly" rare or potentially rare coins that are presently overlooked in the market. If all goes well and demand increases there will be a price spike for that item. For example I picked up a large beads Canadian '65 nickel for $300 now worth several thousand, a 2000p quarter for $750 now worth 12k plus"
How did you determine these coins would not stay "overlooked"?
|
|
Pillar of the Community
United States
2335 Posts |
I collect primarily for the enjoyment of owning coins. For me part of that is the hunt for a deal. I try to buy coins for less than their market value. In a sense that makes every coin an investment, as I could resell for more than I paid. Any appreciation over time is just gravy.
|
|
Pillar of the Community
United States
5825 Posts |
Every series has a hot period and a cool period, and the prices of those key dates reflect as well, only if I have time to devote gaining knowledge to all the series.
I think its when one should buy or sell, if you have a complete collection of a series having similar condition, it would sell easier and at better prices.
Edited by macmercury
02/20/2012 11:44 am
|
|
Pillar of the Community
Canada
1723 Posts |
WELCOME ChesapeakeSmitty AND Because
I am usually the same way as trdhrdr007. Although I do stay near the PM sections. I have my sets that I put together because I enjoy them and enjoyed putting them together. Being pure silver, One day they may be worth a decent profit, But right now they are for my enjoyment. I cant say much about numismatic coins, but unless you find those rare ones that people just cant find...I dont see it as the best way to invest. Thats why I stick with pure silver. Granted, market fluctuations (especially now a days) Really leave a sence of uncertainty in what is to come. I am always buying at different price points.....long term I feel it will work out best for me. Just thoughts...taqke what you will and toss the rest! CHEERS!
|
|
Valued Member
United States
89 Posts |
For me I buy mainly modern world gold coins close to spot price, instead of buying bullion I think there is room for these coins to get numi bump in the future (look at the chinese lunar coins) and not to mention they are also nice to collect.
|
|
Bedrock of the Community
United States
20753 Posts |
 Appears to be a few new members here. As to your question about any investors. That is a yes and no. Yes there are many people here that think of coins as a buisness by buying and selling here, on ebay, other web sites and some may have a store too. However, I suspect that the majority of members here think they are only collectors for the fun of the hobby. For me that too is basically true but there are some things to consider for even us that don't think of this as an investment. I have never sold nor plan on ever selling a coin. To me this is just a fun type of hobby yet when I really, really think about the entire future of my coins, I purchased them in the past for a low price and now they are worth much more. Many too were found in change and those too are now worth much more. For me as an investment, NO, but to whoever aquires this mess, they will be going from free coins to a lot of valuable coins. What I mean is although I'm not the investor, my collection will become an investment to someone. Sounds confusing but for all us JUST collectors, think about how your investing money for someone else in the future. Our coin collections are sort of a 401K or an IRA. |
|
Pillar of the Community
3352 Posts |
Hmmm, I love my coins too much to actually think about selling them ... but I do agree that I'm probably investing in my nephew's and/or niece's inheritance (and I feel that's money well spent) ... ... hopefully, they'll have enough smarts to either carry-on adding to my collection, or at least realize the worth of the coins within ... => *yikes* => maybe I'd better start giving them the heads-up?  |
|
Bedrock of the Community
United States
14454 Posts |
investors usually go for key dated coins in the highest grade possible. They almost always go for graded by a reputable TPG examples for easy liquidation when they need it. These people usually have deep pockets and are the ones that try to keep their name from being mentioned when a deal is made even though their deals usually make an article or two in numismatic magazines and web pages. Their coins are usually purchased through well known brokers that have the connections of other "coin investors" and most coins are traded in private without anyone ever knowing the coin has changed hands. If someone wanted to invest in rare coins there are a few big names that comes to mind to contact as I know they have plenty of contacts that have investment grade coins in their portfolio that may be interested in selling off part of their collections at any time, these are Dave Albanese and Legend Numismatics. I am sure there are other HUGE dealers that can accompany these types of deals but these two stick out in my mind right now as I personally know people that has used these two and have been able to find just about any coin on their list at any time, sometimes even when the seller wasn't really wanting to sell |
|
Moderator
 United States
188213 Posts |
Investor? Of course. Coin Investor? Absolutely not. I will not insist it is wrong, but it is most definitely not for me. I get attached to my coins, so even if I decided to buy a coin as an investment, I would never be able to part with it. That kind of makes the whole idea fall apart.  |
|
Valued Member
United States
234 Posts |
I guess I would be an investor/hoarder of coins. Investor in the sense I realize that collectable coins typically appreciate over time (I've always heard about +/- 8% per annum if calculated over an extended period of time) and a hoarder given I rarely sell anything in my collection.
Being an engineer type, I keep track of each coin I own with a piece of software. To date I've eclipsed some 6,000 coins and that doesn't include bulk coinage I have purchased from time to time and I've squirreled away. Heck, I could probably set up shop as a coin dealer and have an available inventory.
Some day I'll probably sell a few ... so I guess that would clasify me as a long term investor by IRS standards
|
|
New Member
Canada
7 Posts |
"How did you determine these coins would not stay "overlooked"? "
If I could reliably determine that then I would say coins are a great investment, but unfortunately..............
Of course many if not most coins will barely change or decline in value over many years and those risks may be even greater for unpopular series. For me it's mostly a hobby, and I enjoy the hunt and the thrill of finding items that I perceive as rare. There are coins I've spent 15 years looking for and have yet to see an example of so it's quite a thrill when I do find them.
|
|
Valued Member
United States
234 Posts |
Because,
I'm not sure your response was directed toward my post, but as I tell my wife when she feels the need to grouse about my purchasing of anything coin related ... I'm just converting my worthless paper dollars into something that may appreciate over time. Really, I collect for the enjoyment and love of the hobby, but I still don't forget this axiom as relates to the principles of wealth preservation.
When I responded, the operative word is "collectable" when I described the coins I acquire. Sure I have stuff that isn't going to increase in value over time, but generally speaking ... the type coins I collect will (or at least not depreciate over time).
All that said, if I was starving I wouldn't be able to buy a ham sandwich with my wife's collection of shoes. However, I might be able to get by for a few years on what I've accumulated with dollars that now can only purchase a small fraction of what they did when spent on my collection.
|
|
New Member
Canada
7 Posts |
Gmwatson, I was responding to Chesapeakesmitty who asked me that question about coins being overlooked. I do agree with most of your comments although I am a little skeptical about the typical 8% return. Wonder if the stat refers to collections like Pittman and Norweb, which would be a bit like using Warren Buffet to describe typical stock market returns.
|
|
Bedrock of the Community
United States
20753 Posts |
Quote:
Investor? Of course.
Coin Investor? Absolutely not.
I will not insist it is wrong, but it is most definitely not for me. I get attached to my coins, so even if I decided to buy a coin as an investment, I would never be able to part with it. That kind of makes the whole idea fall apart. True jbuck BUT as I mentioned if you really think about it, your coins are an investment for someone that you leave it all to. Although not puchasing for investment reasons, they are an investment for the future owner. Sort of like all your possesions that someone will inherit or aquire. So many on this forum have discussed where their coins will go AFTER. |
| |
Replies: 44 / Views: 4,419 |
Posted 02/20/2012 09:46 am
