My Next 3 Purchases ...

Hi all. Brand new member to CoinTalk and to coin collecting in general.

While I do have a deep appreciation of coins (my father had a nice US silver coin collection at one time), my primary interest is in coins as an investment.

I considered investing in Gold and Silver bullion, but with all the market manipulation taking place I felt that coins were a 'safer' bet, being that they have numismatic value.

I made a rash, uneducated decision this week and purchased a $20 Saint Guardens (1911-S, PCGS MS64). Ultimately, I believe that Gold itself will continue to rise substantially, so I'm not concerned that I'll lose money on this purchase, but I do realize that it may not have been the "smartest" investment that I could have made. Clearly, I need to start better educating myself which is why I'm turning to CoinTalk. From reading these Forums the past few days its clear to see that this is a well educated group

My goal is to invest $5,000 - $10,000 a year in coins ... again, as an investment opportunity. My questions to this group are:

1) Do you agree that investing in coins versus bullion is a wise choice? There will likely be varying opinions in regards to this and I look forward to hearing both sides!

2) Based on a budget of $8,000 remaining for 2011, what would your next purchase(s) be?

Thanking you all in advance for your feedback!

Susan

 

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Coin are a lousy investment. If they were good, there'd be a lot of rich people here. However, if you are insistent on doing so, you are kind of on the right level of thinking. Look for coins that aren't tied to the price of bullion, but rather to numismatic value. The $20 piece would have been a nice choice had it not been a common date, meaning if gold drops you just lost your investment. The only way you'll be able to retain your initial investment and maybe profit over the long haul in coins, is buy the rare and key dates only. These coins are not dependent on bullion fluctuations in determining their values. Of course, in order to do this on the budget you specified, you may have to save for several years before being able to purchase even a single coin in this category. Best of luck.
Guy

 

Old Gold coin in MS-60+ are to me one of the better Gold coins to buy,US& World
but the President spouse series 24kt coin are one of the lower mintage's MS&PR of modern gold coin.they maybe a sleeper coin for now but no one can tell you 10-50yr what will happen with them
Old Gold coin there a population set mintage number can not change.
*unless the 1933 Saint Go marching home!!!as only big Coins!!!
for me that is the best way to go :thumb:
CAC sticker coin I will not buy!
all that CAC mean Causes Add Cost=
Do buy a sticker buy the coin for how it looks & always but Ngc.Pcgs,Icg and Anacs. learn what
a MS-60-65 looks like.
http://www.pcgs.com/
http://www.ngccoin.com/certlookup/index.aspx
http://www.anacs.com/
http://www.icgcoin.com/
:kewl:

 

:thumb:

In my opinion I rather put my Investment in a Key Date Valuable Coins the returns is Huge. To be a good Investor in RARE COIN you must be an Expert and Knowledgeable One. If you do not have these Knowledge I think you better put your money in CD. Bank is the Safe Place.:thumb::thumb::thumb::thumb::thumb:- HOBBY of a KING- Knowledge is a KEY.....

 

I largely agree with the advice above. It is very possible to make money in coins, but it requires an amount of knowledge that most people who are only looking for an investment will never acquire.

For example, I personnally collect US large cents and we had a very recent large collection hit the auction block, The Dan Holmes collection. His complete early date collection hammered for $10 million total, with a realized profit of around $5 million. But it took over two decades to put the collection together, and many of those coins are an order of magnitude higher value then your budget. In addition, during that time he was a dedicated early cent numismatist, was the president of the Early American Copper Club, and knew just about everyone in the large cent game. So yes, he made quite a bit of money off that collection, but it took a tremendous dedication and love of early copper to achieve it. Check out his early date coins at: http://images.goldbergauctions.com/php/toc_auc.php?site=1&lang=1&sale=54

My advice, buy coins if you like collecting coins, but don't buy coins for investment purposes. Yes, some people make money off their collections, but those tend to be people who put the collection together because they loved it not because they were investing. The same guy in the example above also put together one of the most complete late date large cent collections ever assembled, and lost money it...

 

Thank you for the feedback so far.

I'm open to learning and making/changing my direction as I go so I wouldn't say that I'm insistent on solely purchasing coins (I'm actually purchasing some small amounts of Silver Bullion although I've put that on hold temporarily).

As for the Saint Guadens purchase, I felt that the 1911-S MS64 Saint Guardens was a decent buy based on the fact that that particular mintage was around the middle of all Saint Guadens mintages (775,000). With that said, I understand that mintages may not be an entirely appropriate means for evaluating rarity in this coin since many were lost due to melt.

That's neither here nor there. I'm not trying to defend my purchase as it was not a very educated decision. As I previously mentioned, I'm under the opinion that Gold will continue to rise and thus I do not feel that I will lose money on this coin. On the upside, I fulfilled the whim of owning one of these beauties. I do have a strong appreciation of certain coins and take personal satisfaction in owning them (I've kept my Dad's Morgan and Peace Dollars).

It seems that the route for me to take may be in purchasing some coins that I just really like, and augmenting that with bullion purchases.

 

Congrats on buying the Saint Guardens by the way, they are a beautiful design, and welcome to collecting! I realize now my post above did not include those two important thoughts.

One last thing to think about. I bought a lot of random stuff before I finally figured out what type of coins, and which type of collectors, really speak to me. I have since sold most of my early purchases off because it does not fit what I want to do. So take your time and figuring out what you like. Then once you have an idea, buy some books and do some research.

Good luck collecting and welcome again.

P.S. to answer your question about what I would do with 8,000 I would buy a 1793 chain cent...

 

I have been collecting coins and rare books for about 15 years and they have appreciated considerably during this time period. But I never looked at these as investments. Since I only made purchases on items I loved, I do not see ever selling them.
If you plan on making money from buying bullion or rare coins, you will be competing with very, very knowledgeable people. Also, remember, that most markets are cyclical. Very few investments keep going up all the time.

 

DO NOT INVEST IN COINS! Period.

Coin Investments by newbies with "money to burn" might just as well light a match to it since they are exactly the same as someone investing in Stocks who doesn't have a clue as to what they are! It's just money down the toilet!

Take your $10,000 a year an "invest" it in learning about numismatics. The ANA offers some dynamite courses during their summer seminars which is money well spent.

 

What coin books do you have? A recent Redbook? The Whitman/Bowers books on Morgan dollars, $20 Gold coins, & US Type coins? You should get all 4 of those, just for a start.

It sounds like you really do have a budding appreciation for coins. If you got the MS64 Saint at a fair price, I think that's a fine start, & you did the right thing in getting one in a PCGS slab. And probably any coins over $200--$300 you should get in PCGS or NGC slabs.

Of course the $20 Saint will plummet if gold drops by 50%. If you're building a collection for the next 20 years, & love the coins you're buying, you can view price drops as buying opportunities. As a collector, I'd have a huge wish list with your budget.

I do like the idea of--"if" you think gold will go up--buying interesting older US or foreign gold coins, British sovereigns even, more "classic" US gold type coins; $5 & $10 liberties, & Indians, etc., instead of more common modern bullion coins.

 

Honestly, I say you should put your money in a Roth IRA. Coin collectin should be done for the love of coins not for investments. I buy coins I like and if they increase in value, then that will be great for my grandkids. That is just my opinion though.

 

Thanks again. I max out my Roth IRA each year @GJ1103.

@beef1020, thanks ... I'm very happy with my purchase of the Saint Guardens. As @WoodyWW points out, I realize that the value of the coin is tied to the price of gold ... and based on the current price of gold, I'm ok with that. Gold has shown to have a high degree of stability over the long-haul. I agree with @Woody that price drops are an opportunity to buy (both coins and bullion -- which is why I've temporarily suspended my silver bullion purchases; awaiting (hoping for) a market correction. Since your posting I've been reading up on the 1793 Chain Cent

@WoodyWW, you made an interesting comment in regards to Gold and Silver Bullion being a great investment (you advised caution). However, in looking at the numbers for both Gold and Silver over the past 10 years, one could argue that either would have been a wonderful long term investment.

 

I totally agree!

 

Outstanding!!! I wish I could.

 

Depending on how far you want to take things, some paper currency might be better than coins, though for this you will need to study a lot and then have a sizable amount of cash to throw down. At least paper maintains realistic premiums and is not tied to hyped-up bullion prices or investor trends. That alone makes it the first choice for me if I were gambling this way.
Guy

 

Well if you look at the last 10 years you have looked at the greatest period you could possibly choose in the history of PM. Like most small investors there is a strong prediliction to "chase returns" meaning look at the near history and base your investment decisions on that. This is simply dangerous.

Put it this way, you go into a store and a blouse is price $100. Now, a few weeks later it is priced $150. Do you grab them and want to buy three? Same scenario, but the blouse is $50. Do you throw your head up in disgust and say I will not buy it at any price? This is what small investors tend to do. I am a garbage man, liking to buy things people are bored with and not interested in. I bought my silver at $4 or less in the 90's when everyone thought it was a stupid idea. Today I invest in stocks people are bored with. That is "investment".

Buying PM can be an investment. Buying coins is a hobby. There is simply too much of a buy/sell spread unless you are a dealer to make much money investing in coins usually. Your St Gauden's price premium will go down and down as gold goes up, making it better, if you are just investing in gold, to have bought simply pure gold and not a MS64 coin.

Buy coins for culture, history, enjoyment. Buy stocks, bonds, real estate, and PM for investment. I know its very hard to get stuck in the middle, many are, but in the middle is kind of the worst of both worlds. If you like PM but kinda like coins, buy intersting coins at bullion value, items like circulated WL and Franklin halves, mercury dimes, ASE, etc. You can still "collect", but only be into the coins the silver investment.

Also beware of "key" coin investing. Same as before talking about PM investing, "keys" have gone up dramatically, but that doesn't mean they will continue to. People buying them BECAUSE they have gone up may be buying a $150 blouse that will go on sale tomorrow. If you want to invest in rare coins, you can, but to me rare coins are coins that are truly rare, not 1916d dimes or 1914d pennies. Most of my "common" ancient coins do not exist in 1/10th the numbers these "rare" American coins do.

Hope this helps,

Chris

 

@GJ1103 ... thanks. I've always been a huge saver. Looking now to take a couple of bucks and speculate. If it doesn't pay off in my lifetime, others in my family will benefit

 

I wish you all the luck in the world with it. You have come to the right place to learn. There is so much to take into consideration when dealing with coins, bullion or even paper money. Everyone on here loves helping others with coin collecting (or investing ), trust me, they have helped me out more times then I can count.

 

@Medoraman, that was extremely helpful. Thank you.

I agree that buying coins is a hobby, and one of my concerns when I initially posted was that I would be insulting collectors. That certainly isn't my intention. I can easily see why collectors would collect for the pure joy of the hobby. I can also see myself acquiring a few coins for no other reason than wanting to own them.

With that said, I'm also looking at this from an investment perspective. The "junk" silver market is one I have been dabbling in and I've recently picked up a bunch of Walking Liberty and Franklin half dollars at what I consider to be very reasonable prices (I'm on the plus side for all of these purchases). That may indeed be the best way for me to go, as it satisfies my desire to own coins, yet I'm not purchasing them at a premium.

Thanks again.

Susan

 

If you want to buy junk silver, the website www.coinflation.com will give you a good idea of the value of the silver content. If you haven't been to it already.