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 Replies: 24 / Views: 4,631 |
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New Member
United States
9 Posts |
Hello, I wanted to share an analysis I prepared of my coin collection investment and I apologize in advance at the length of this post.  First a little about myself. While this is my first post under this name, I am not a rookie forum member. I decided to create a separate name because I wanted to share some more specific data and didn't want to reveal who I was or where I live. You see, I've participated in Secret Santa's   and traded a few coins so I wanted to protect my identity. Plus I post a lot and just wanted to keep this separate from my other forum identity. I will say that I won't be the guy who will post in this thread...lol. Now to my confessions...I am a coin junkie. Probably many of you are as well, otherwise, you wouldn't be here. Ive assembled the majority of my collection over the past 25-30 years but have been a collector ever since I was 7 years old. My collection has evolved over time. I went through Morgans and Peace dollars then I went through a classic commemorative phase. But lately I've focused on type coins. My collection ranges from 1793 all the through to modern. Because of the sheer number in the type coin arena, I've found my coin "sweet spot" to be VF to EF but have coins that are better (or worse) depending on their cost. I focus on only purchasing problem free and original coins and try to buy better dates. It hasn't always been like that as I've purchased a few stinkers during my formative years but I've mostly unloaded my mistakes to focus on quality material. I am a CPA and accountant by trade and am very detailed and take great notes of my collection. I've kept a detailed spreadsheet for my collection since 1992. I know exactly how much I paid for that BU Walker in my collection and where and when I got it. I can see where I went through buying 'spurts' and when I slowed down because I was too busy chasing two little kids around the house. Since 1992, I have paid $32,871 for my collection. That may not be much compared to ya'll but it has been plenty for me. I've always tried to stay grounded and make sure it was just a hobby. My kids always had a roof over their heads and food on the table. That was always most important to me. However, I have made a few purchases ( ok quite a few) where I would try to sneak it past the wifey and I got caught once in awhile. I always stressed it was just an investment, I wasn't losing money, and I can pass it down to the kids. Herein, lies the problem...while I haven't lost money over time...the investment has had poor returns and the kids don't share the same passion for the hobby. So, I've invested $32,871 in my collection over the years. I estimate, based on a realistic outlook of what I could sell my collection for, that it's current value is $42,246 or a gain of $9,375. For comparison purposes, had I invested that $32,871 in the S&P 500 (investing my dollars at the same dates as I purchased new coins) this investment would be close to $80,000 or nearly double. Plus, the S&P 500 investment will be much easier to liquidate. That may not be a shocker to everyone reading this but it was enlightening to me. Now my kids are growing up fast and we're starting to look at colleges. We still owe money on the house and things aren't getting cheaper. I know I have a great coin collection but that $80 grand sure would look great right now too. Maybe I am having a middle age crisis...this post sure was long enough...but I thought it might be helpful for other forum members to look at my own analysis and situation. Focus on purchasing coins you know will increase in value or will make your collection better. Don't take a flyer on that coin on ebay that 'may' come back looking better than the blurry pics. Don't sneak purchases past the Mrs. (this one will be especially hard for me). Make a realistic coin budget and stick to it. Most importantly, analyze and assess what you have (both in your coin collection and in your lives) so you can maximize your investment and enjoyment in the hobby without any regret later! |
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Valued Member
United States
338 Posts |
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Valued Member
United States
120 Posts |
Great analysis. Thank you for sharing.
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Bedrock of the Community
 United States
12477 Posts |
This is interesting. I can't help but to try and figure out what your primary username is.  Don't worry, that's just my personality and if I do figure it out, my lips are sealed.  Your advice is spot on. I've recently come to more appropriate terms with my goals and have happily decided to narrow my focus and remove (sell/give) a lot of mismatched extraneous things that don't fit. The giving is way more satisfying and that's why I enjoy holding contests.  I've learned a few things fairly quickly about numismatics but, I have to decide what the hobby is for me. I can't chase everyone else's interests that I read about. I think I've narrowed it down to a couple of things that are both financially achievable and fun.  In Memory of Crazyb0 12-26-1951 to 7-27-2020
In Memory of Tootallious 3-31-1964 to 4-15-2020
In Memory of T-BOP 10-12-1949 to 1-19-2024
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New Member
 United States
9 Posts |
We frequent many of the same subforums spruett That's a good point regarding narrowing your focus and not getting hung up trying to collect everything you read about. I've been a victim of that here in the forums. I see a great collection that someone posted and it gets me interested in it and I lose track of my own collection. Recently, I was drooling over a gorgeous small cap bust quarter that was priced at $775. It was priced over current market value based on Numismedia and other guides but it had the CAC sticker and was one of the nicest circulated examples I've ever seen. I already have a great example in my collection but I kept justifying in my head the reason I needed it. I resisted (so far) and the coin is still for sale. There will always be examples of those coins for sale in any series. I'm trying to stay focused on my goals and not over commit my resources. Edited by punkcpa
06/21/2017 06:55 am
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Rest in Peace
United States
18456 Posts |
Enjoyed reading your thread . I think that most collectors , even though we say we're just collecting for the fun it have this inner thought of future value in our coins that perhaps one day we can reap the rewards or our children , ( Grand children ).  |
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Bedrock of the Community
United States
17884 Posts |
Yes the stock market would have been better, and if you look at your "investment" in the coins compared to the rate of inflation you'll probably find that $9,375 profit vanishes as well in real terms.
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Rest in Peace
United States
2668 Posts |
I really have to organize my 'accumulation'. |
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CCF Advertiser
United States
1533 Posts |
It is for this reason I have put a limit on how big I will let the collection be. Ultimately, it will likely not be one of my best investments, so it is fair to limit it as a percentage of my portfolio. Just have to commit to selling something in order to buy something else.
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New Member
United States
9 Posts |
Quote:
I think that most collectors , even though we say we're just collecting for the fun it have this inner thought of future value in our coins that perhaps one day we can reap the rewards or our children , ( Grand children ). I think that is one of my main concerns T-Bop. That was always in the back of my mind but I would have done much better just sticking it in a fund that tracks the S&P. I asked my kids...keep in mind that they're teenagers...if they were ever interested in me handing over my collection to them and their only comments were about the worth of it and how they could sell it. That was a little disappointing response but at least it was honest. I wanted to share my data with other forum users as I found it enlightening to me and hope others find it interesting as well. When you compare the realistic value of my collection vs. how I could have done investing in the stock market it is pretty eye-opening and that delta will only get worse over time. |
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Moderator
 United States
188213 Posts |
A good analysis.  For me, coins are treated as a consumer item, just like a TV or smart phone. I never expect to get out of them what I put in, as I never intend to sell them. I have what I call proper savings and investments for rainy days, unexpected expenses, or retirement. It might not be right for all, but works for me.  |
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Pillar of the Community
United States
2130 Posts |
Good write up.
I thought I was having a dream while reading it. It sounded just like my life! I am a business major and I also keep very detailed records of all of my purchases. My kids are not yet teenagers and I am not sure if they will be interested in my collection or not. I hope so...
My coin money comes from a side job so my wife doesn't care too much about what I spend on coins, but honestly she has no clue. All of my primary job income goes directly into the checking account and it is used for normal monthly expenses. I think about what I have spent on coins/bullion and I stop and think what could I have done with that? I have only been in the hobby for 10 years but the amount of money you spend adds up quick.
I have finally stopped buying any and everything I see I like. I don't think I have bought a numismatic coin this year. I have sold some of my coins that I was no longer interested in. Hardly ever did I make money selling. Sometimes I broke even and most of the times I ended up losing $10-$20. I am excepting my small loss as a learning experience. I am also telling myself that if I didn't spend it on coins I would more than likely spend it on things that produced no return and would be worthless after spending money on it.
Edited by Connor
06/21/2017 9:19 pm
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Valued Member
United States
211 Posts |
Thanks for sharing. I think your experience is probably similar to what a lot of people experience.
For reference, you can compare the gains to inflation. $100 in 1992 is worth roughly $180 present day dollars. $100 in 2002 dollars is worth roughly $140 present day dollars.
If I assume your purchases were made consistently over the past 25-30 years, then your collection has tracked with (or slightly behind) inflation. In terms of real money value, the collection may actually be worth less.
Conservative investments like US Treasury Bonds would have performed better over the same period of time.
I think you gave good advice. Collect coins. Don't invest in them. I buy coins because I love them (and I hope I'll get my money back). I buy equities when I want to invest. Coins can be a part of my future happiness and entertainment, but likely shouldn't be a part of my future financial security.
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Bedrock of the Community
United States
11951 Posts |
As with many other members here, this also rings true for me.
I do hope some of the coins I have purchased will maintain or
increase in value. I know many of them will not, but I do like
filling albums.
I try to keep a balance and also purchase bullion related coins,
bars and rounds. This could go either way, as far as investing goes.
I wish I had kept better records, but then it might be scary to know
how much I have put into my collection.
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Pillar of the Community
United States
1450 Posts |
I have tripled my money at least over the last 20-30 years via long term stock investments I made using dollar/cost averaging since the late 1980's. The only fun part is looking at my capital gains and dividends. With coins you have something beautiful in your hand but no dividends.
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Pillar of the Community
United States
5854 Posts |
I personally not a big fan of coins as investments but I usually focus more on sub $1000 coins and perhaps things might be different at the top. I have often heard and read that the ultra rarities make good investments. So back in November of 2016, I decided to conduct relatively quick, crude study to see whether there might be merit to investing in ultra rarities. Data for the study was gathered from the auction description. All coins were U.S and ranged from colonials to federal issues to patterns but with a heavy emphasis on federal issues. Most of the coins I looked at sold for more $100,000 at the most recent sale with a few in the high 5 figures. All coins must have sold at least twice and at least 20 years apart. I chose 20 years to help ensure that the period would include at least one market cycle. Prices used in the analysis were actual sales. For the stock return, I used the dqydj.com s&p 500 periodic reinvestment calculator. The management fees were included in stock return. Neither the costs to sell the coins nor taxes were included in the analysis since that varies from individual to individual. I included a tie category if the returns were within about a percent of each other or if the coin sold more than 3 times and in some periods did better and others worse by roughly the same amount and same number of periods. Finally, the returns used to make the comparisons were geometric.
So out of 147 coins, 49 did better, 89 did worse, and 9 were about the same or indecisive. The colonials and non gold federal issues had 27 doing better; 29 doing worse; and 4 about a tie. The federal gold had 15 doing better; 51 doing worse; and 5 in about a tie. Patterns had 7 doing better and 9 doing worse. If I recall correctly, many of the coins especially the gold had auction dates in the 1980's and many were Pogue coins. Looking at greysheet prices and stock market data from 1980's that seemed like a period when coin prices were relatively high and stock market valuations relatively low. There were probably several aggressive bidders for the gold coins driving up the prices. I think these factors may be why so many gold coins failed to beat stocks. I know that this analysis is flawed but something more sound would be very time consuming. Take it for what it's worth.
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Replies: 24 / Views: 4,631 |
Posted 06/20/2017 9:50 pm
