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 Replies: 40 / Views: 4,172 |
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Valued Member
United States
449 Posts |
I am addressing this question to collectors/investors who have been around for a while to recognize coin market trends regarding rare key date coins versus high grade common date coins (condition rarities).
My question simply is: What is a better investment, low grade key dates or high grade condition rarities? Just like in any market there is always a better route. I am curious to hear opinions because I am interested in setting aside a fraction of my savings to invest in coins.
Please share some of your successes and mistakes if you are willing to.
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Pillar of the Community
 Canada
5393 Posts |
Better question......................should you even invest in coins? My personal take is collect coins because you enjoy them. Coins are a terrible investment for over 99 % of collectors.
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Valued Member
 United States
449 Posts |
I can still enjoy them but in the end I would like a return on all the time spent picking and choosing and researching. You can't take your coins with you when you pass on. So even though it is a "collection" what is the point if you make poor or misinformed purchases? Collecting just because you like them isn't good enough for me personally. I am always hunting for a deal to ensure my profit margin is satisfying. Sadly with our economy I am thinking about my future family's future and any extra dollar earned is important to me. I do know there is money to be made in coins just like in any market. I just happen to be very passionate about coins. I am not putting all my eggs in one coin basket. I would just like to hear from people who have used coins as an investment vehicle and have had success.
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Pillar of the Community
United States
604 Posts |
Good question. Also, one that will probably get many different perspectives on which is the best way to go.
Personally, I've always leaned towards key and semi key date coins. The main reason is because there is always going to be a limited supply, and the demand will always be there. By looking back on the trends (5, 10, 20+ years) they have always proved well.
On the other hand, investing in high grade common coins can be more like playing roulette. The prices may continue to rise over the years because of demand. However, every time another coin is graded the same as yours (or higher), it will diminish the value; simply because there are more available in a higher grade.
Edited by Nickel Guy
04/14/2015 11:43 am
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Bedrock of the Community
Australia
21786 Posts |
Even for the successful coin investor, there are better alternatives than coins to invest in.
High grade vs. rarity?
If two coins of exactly the same value, one common but high grade, the other rare but low grade, had exactly the same sale price, which one would be the best investment?
I would have equal money on each one, in an each way bet.
The moral?
Buy what you like and enjoy it. Forget the consequences.
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Pillar of the Community
Canada
5393 Posts |
\\have a listen to the last episode of the Coin Show Radio with Matt and Mike. Coins are a tough way to make an easy living. The industry standard for NET bottom line on a successful coin business is somewhere south of ten per cent for a well run operation. It is a tough, highly competetive business and NOT that easy to profit from. Just remember you are the part of the same "wolfpack" all hunting for deals. Having been in the business for over 40 years I can tell you this...........the meal selection goes from rice and beans in a bad month to prime rib in a good one. In the coin business you are always the last one paid. Bills first then you.
Unless you have a rock solid background in both business and coins and are well capped financially..............sorry, in my experience it is a quick road to failure. Start small and do a few coin shows and you will see how it goes.
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Valued Member
United States
449 Posts |
"Even for the successful coin investor, there are better alternatives than coins to invest in." I understand, I also have more traditional investments, but coins are a lot more exciting so I am hopeful to make them work as investments. "Buy what you like and enjoy it. Forget the consequences." I do enjoy what I buy, but why does it seem to be a common occurrence on this forum to ignore the consequences? I don't have extra money to spend on coins so I sell on ebay to make my own money to buy coins. Why would I ignore the consequences to watch all my hard work get washed down the drain? Does anybody have any specific instances or purchases that they can share? Any insight or tips. I am sure they are a few CCF members who feel they same way I do. Edited by eagle_eye_18
04/14/2015 11:56 am
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Valued Member
United States
449 Posts |
Luckily I am not leaning towards coins as a living. This is strictly a side thing.
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Pillar of the Community
United States
604 Posts |
Quote:
Coins are a tough way to make an easy living. I don't think that's what he is asking. I think he is referring more about long term investment in coins for the possible future well being of his family. I, myself, have been in this business for over 37 years and I agree it's a tough way to make a living (that's why I just collect now). However, some of my personal collection has risen substantially over the long term. They are still part of the collection, however they can also be classified as investments. |
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Valued Member
United States
449 Posts |
Thanks Nickel Guy. You nailed it. Your collection has grown over they years and I am sure you didn't just randomly make purchases because you liked those coins. I am sure you had a plan in mind. I am looking for tips to put together a solid collection that will appreciate over time. Do you have specific coins that have done better than others? I have the time (hopefully) I am 25 years old.
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Pillar of the Community
Canada
5393 Posts |
nickel guy true enough. I am willing to bet that it was YOUR in depth knowledge and business sense that allowed you to buy some nice pieces with the profits of the coin business. I was just trying to relate to the OP that for almost everyone (not all) coins are certainly not a recommended investment vehicle.
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Pillar of the Community
United States
604 Posts |
@Pacificoin
Please let me explain a little. I don't think over the years it was my "numismatic savey" that helped make the right decisions on what and when to purchase a coin.
It's just that I noticed when I purchased semi and key dates for my collections, they've increased in value. And over a period of over 35 years on some of them, the profit margin is over 100%. Although, some have only increased 25% in all those years!
It's like I mentioned to the OP in the beginning, it's all supply and demand. Just like any other investment, it's a gamble.
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Pillar of the Community
United States
9395 Posts |
Of the coins I have, the ones that have done best over the decades are:
- Any gold coins (even common ones) obtained when gold was $35 per ozt.
- Early silver type coins (1794-1807), especially the dollars
- Early gold type coins (pre-1834) -- it's too bad I have only one of these
- GSA dollars purchased directly from the government
- Common US "junk silver" coins, pulled from circulation in the 1960s.
Of course, what did well in the past may not do so well going forward. If you are in this as an investment, you need a crystal ball. You need to know what coin collecting will be like in 50 years. Maybe perfect counterfeits will ruin the hobby? If the economy gradually collapses, will lots of people still be interested in coins to drive up demand?
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Pillar of the Community
United States
604 Posts |
Quote:
Early gold type coins (pre-1834) -- it's too bad I have only one of these
Sweet!  That's one more than me |
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Pillar of the Community
United States
3486 Posts |
Investing in coins? I have never done so. However, I have made a good purchase or two over the years. "Condition rarity" can mean two very different things: Modern 'coins' made for and held by 'investors' and Circulating coins which have survived in low numbers in higher grades. Modern coins, because they were minted with modern equipment and targeted at investors, will survive in high numbers. Circulating coins, subject to the demands of commerce, do not have the same chance of survival in high grades. However, low grade key coins are available and will continue to be available. This leaves an area which MAY be used by a would-be investor: Higher collector grades which have a low survival rate. Go to any coin show and compare the availability of the 1909-S VDB and 1914-D cent in VF-20 condition. Chances are there will be many more 09s than 14s. Why? 1909s were saved by collectors AND the general public. Five years later only collectors saved the 14s. Mercury dimes? I wonder if the 1931-S was saved in large numbers. The Depression was in full swing. Are there many XFs and AUs to be found? All of the classic series have these dates which for one reason or another 'should' be available but are not easy to find. So, in a nutshell, my advice would be: 1) Pick a series or two that you like. 2) STUDY the availability of the semi-keys in the high middle grades of VF, XF and Au. 3) Buy according to your budget. Just for fun - Put together an imaginary type set of 1919-D coins in XF and AU. (Cent through Half Dollar) It will not be easy. None are considered to be keys but ... study the auction sites and learn if they are often offered. Of course, just an observation of mine. |
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Pillar of the Community
Canada
1747 Posts |
I don't think you can take the lessons of past purchase, like what Nickel guy has referenced from his personal collection, as to the Future of the business. first off 30 years ago there was no internet, do things were harder to find, 10 years ago the forgeries were easy to spot, 5 years ago there were no fake TPG slabs. You cannot predict the future, as in all "investments" however if the coin market crashes will you still like your coins that you bought? several examples of what may happen, in Canada the BOC released a hoard of uncirculated gold coins from the teens, just imagine if the US suddenly says hold on, we have these st gaudens hiding in the back closet (that they did not melt down) lets sell them, and flood the market? |
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Replies: 40 / Views: 4,172 |
Posted 04/14/2015 11:29 am
