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 Replies: 16 / Views: 2,941 |
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Pillar of the Community
United States
629 Posts |
If the world is going to go into monetary shock and the values of coins are going to shrink. Where should I put my money? I am a collector, I want to collect but I don't want to lose money.
Therefore - are collectible coins or bullion a better investment in your mind?
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Pillar of the Community
Canada
1442 Posts |
I wouldn't touch bullion at these levels. The largest bet in the world in the last 3 years is that USD is going to crash. That's why everything else has been going up in tandem: stocks, commodities, Canadian/Australian currencies, precious metals. This is starting to swing the other way, and I see no reason why silver can't see $15-$20 in the near term (1-2 years), and gold $800-$1000, after the recent bubbles, while the USD strengthens. Coins are already taking a hit it seems...I think if you're buying 50-70% off trends, with trends being supposedly the prices that people with no access to auctions are/were actually paying...then that should be fine...I dont envision Mad Max scenarios, so as much as I'd like to buy a 1921 5c in MS60 for a bowl of soup, 2 eggs and a potato...I dont think its gonna happen :)... But coins are definitely not a great investment. Liquidity is the problem. They are not easy to sell, certainly not now. The other issue is you lose at least 10% to ebay or 20% to the wonderful folks at CNC to "unload" your coins for you :)...unless you find a buyer privately. So the answer is neither is a "good investment"...but I think the risk with bullion is getting caught in a big RISK ON unwind with silver/gold taking a nice hit along with the rest of the anti-USD crowd...while coins will probably muddle through...and may eventually find favour with investors again... |
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Bedrock of the Community
Australia
21788 Posts |
Diversify.
Collect coins AND bullion. Like anything else, know your market first.
What's wrong with doing both at the same time.......collecting scarce (not rare) coins that have significant bullion value, e.g. MS63 common date Morgans, readily available, easily recognisable by everyone, easily bought and sold.
You will like the look of your collection, so will lots of other people. Just make sure that the wrong people do not know about your collection, because of it's commercial significance.
Another approach is to buy into a market that has already taken a significant hit. Real estate comes to mind. My son has to change jobs soon, because his business is to close (as planned a long time ago).
He has an American wife. They decided to live in Australia after they married, because they could not afford to buy a house in the U.S. at the time. They now have an excellent chance to buy a house outright in one payment now! Can't do that in Australia just now, not on their income.
Edited by sel_69l
07/12/2011 10:40 am
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Pillar of the Community
Canada
627 Posts |
In keeping with the coin theme, I'd go after key dates and high grade stuff. You have a smaller market to sell to when the time comes, but that smaller market has the money. The ones with the money will figure out a way to keep their money when things go to pot. The average joe collecting the average coin will not be buying anything, and in fact will be trying to sell his average collection. So... the average collection will be a bigger market, but with falling prices, while the high end coins will be a much smaller market and fewer buyers, but those coins will hold their values.
just my opinion.
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Valued Member
Canada
371 Posts |
I would invest in some underrated Newfoundland coins. The Victorian 5 cent series from 1865 to 1888 is very underrated, and deserves more attention from collectors IMO. Try to find the entire set in problem-free EF-40.
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Pillar of the Community
Canada
1554 Posts |
 What tfred said above:"In keeping with the coin theme, I'd go after key dates and high grade stuff. You have a smaller market to sell to when the time comes, but that smaller market has the money. The ones with the money will figure out a way to keep their money when things go to pot. The average joe collecting the average coin will not be buying anything, and in fact will be trying to sell his average collection. So... the average collection will be a bigger market, but with falling prices, while the high end coins will be a much smaller market and fewer buyers, but those coins will hold their values." I couldn't have said it better! Glenn  |
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Pillar of the Community
 United States
629 Posts |
Thanks for the advice - I still continue to buy coins and prefer silver issues from 1870 to 1952. When I spend the money I do go after coins that are below market and have been undergraded. Some coins I do buy for their "bullion value" but I think of it as rescued coins - coins that otherwise would have ended up at the smelter. Therefore, getting a silver coin that is sold at melt but has numismatic value. I don't believe that I will get hurt even if I were to sell when silver is at $15 as most of my collection was bought at under $10/oz.
Key coins are always king - when ever I can, I purchase them - not necessarily in top notch condition but coins that are in excellent resaleable condition.
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Pillar of the Community
555 Posts |
danlos9551 made a very accurate summation.
If you're American and under 40, social security may be greatly reduced or non existent for you. Plus your medical insurance in retirement (Medicare) will end up costing about what your present private plan contribution is (say currently $700 a month). Canada's OAS kinda sucks worse than our social security. Thus, you will need lots of income from elsewhere to retire, or you'll be working until your 80. Answer is: Real estate. The bottom in the US is still a couple of years away. Vancouver, BC hasn't stopped exploding. I follow both Vancouver and SoCal. You need rental units. In the US get a 15 year mortgage and in year 16 that's your retirement income. I assume you don't have a huge savings, so partner with someone. Jerry Buss bought a 4 plex with a friend, and kept buying units and got enough to buy the Lakers, LA Kings, and the Forum. Almost every NFL, NBA, NHL owner bought their teams through RE. When you go to buy other units the banks will look at, and include your other rentals, so you no longer need a partner. Every rich person that I know personally, made it in real estate. None made it in buillon, the stock market, and certainly not coins.
Edited by Neil
07/13/2011 4:44 pm
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Pillar of the Community
Canada
1051 Posts |
I agree with Neil. Real estate allows you to build equity while generating cash flow. There are lots of investments that will do one or the other, but few that will do both. If you do it one house at a time for a while, there are also no capital gains.
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Valued Member
Canada
451 Posts |
I would just prepare for the prices of our collections to drop. The key is to not panic and stick through it. As already mentioned, focus on getting the rare stuff.
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Valued Member
Canada
68 Posts |
obviously by name I'm a big bullion investor and I truly believe silver is a great buy. But I am diversified in coins, cards, and collectibles as well as the stock market. I make %15-19 on my investments each year for the past 4 years and I use that to buy my collectibles. so really its a win win.
Overall the best investment is when you are making passive income.. ie/ real estate , divident paying stocks
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Pillar of the Community
Canada
576 Posts |
It's a really tough call. If I thought the markets were actually free it would be easy. The US dollar should be puppy paper but the country continues to have some inexplicable means to magically keep the greenback afloat. Even the Dow, with an increasingly challenged American economic picture, defies gravity. I like silver. If the fundamentals are correct, it should do well. If you're familiar with previous silver collapses you'll know silver's current behaviour is exceptional. It seems to have solid support in the low thirties and refuses to break down. That wouldn't have happened in the past. Best buy at the moment? Silver jewellery and cutlery at flea markets and auctions. You can usually buy it at a good discount to its intrinsic value. If silver breaks above $50 and stays there, an active market in this jewellery etc. will be initiated quickly. Just my Two Cents worth. None of us knows for sure. |
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Pillar of the Community
Canada
1442 Posts |
The problem is that silver has just gone through a parabolic blow-off top and those rarely recover quickly, if ever. And lets face it, you could have bought silver to your heart's content at $9 / oz just 2 years ago, so this is a purely speculative bubble, not a fundamental move. I've watched hundreds of people buy bullion on ebay for $55-$60/oz, and with silver struggling to stay at $35 now...those people must already be hurting. 30% investment loss in 2 months on a precious metal? OUCH. The technical charts of Silver, Platinum and Palladium are in a precarious position and weakening. Gold is holding steady at the moment due to panic in Europe over Italy about to blow up... Soros called Gold the ultimate bubble for a reason...it'll probably be the last one to POP... People like to say the US dollar isn't backed by anything. I disagree. The US dollar, the reserve currency of the world, is backed by 9600 nuclear warheads, over 700 military bases in over 150 countries, the largest naval fleet and airforce in the world, control of most of the world's oil, etc....go ahead...bet against that...LOL...load up on Renminbi, learn Chinese, study up on Marx and Engels and see how that works out for you ;). QE1 and QE2 are red herrings. The FED isn't printing money. Its just swapping paper. Its not doing much to solve the underlying problem of the balance sheet recession and its starting to become obvious. Housing is double dipping and deflationary pressures are massive. I agree with the posters about real estate. Its one of the few ways to get rich IF you know what you're doing and your timing is excellent. And in this environment, you have to be the best of the best to make it in real estate. Cash is king in a deflationary environment. I have enough of it...and am picking off ebay cherries by the buckets. Maybe I'm a bit early and maybe Canadians will start unloading the good stuff en masse. But some of my purchases are already top 20 or even top 10 ever graded, so I figure I'm fairly safe. I'm sure we can find 10-20 rich Canadians who still have $$$ to collect coins after this is all over ;). |
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Pillar of the Community
United States
629 Posts |
Of course timing is everything added with a touch of luck.
We each have our disposible income that we like to funnel towards something that we feel will give us rewards both with improving our collections and also give us something that is worth more or stated correctly "sells for more" than what we paid.
I have always felt that whatever I purchase, if I could make 20%, I would be happy provided I could do that day after day.
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Pillar of the Community
Canada
576 Posts |
Danlos, I always try to keep things simple. Silver has just jumped $30 this year and it's held it. Technically, that's strong. And gold has shown immense strength breaking to new highs lately. We all can get caught up in this inflation-related profiling but looking at simple figures the metals have done well. Personally, I think the US is gaming the world financial system and if the federal reserve was audited - which it should be - this house of cards would collapse. It's tough to make predictions on where to invest because, crazy or not, I think the fundamentals are less important than the hands stirring the pot.
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Pillar of the Community
Canada
1442 Posts |
If silver holds the $30s the next 2 quarters, then I'll be inclined to believe the support is solid and we can expect new highs in 2012.
The next 1-2 quarters will be key IMO, as I expect some significant developments either way...
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Replies: 16 / Views: 2,941 |
Posted 07/12/2011 10:30 am
