I have been accumulating silver from coin roll hunting for about a year now, I haven't found a crazy amount, but I've found enough to buy a couple of coins to start my collection. I have using the PCGS and Numismedia online price guides for an estimate of the coins value, as well as ebay completed listings. Since I've only been doing this for about a year, what I am wondering is, how do coins that have numismatic value fluctuate in value during recessions or downturns in the economy? Do any of you remember during the 2008/2009 crisis when things were crashing, did coins hold their value? For example, I was looking at a 1882 CC Morgan PCGS MS64. I see the price guide value is around 280-290. During the lows of 2009, was this coin still selling for around that? Also, do coins value tend to go up over time?
Note the vertical scales in both of those graphs. That "dramatic drop" in the top graph represents about a 7.5% decrease from peak to trough, and corresponds to the last little wiggle in the rightmost two divisions of the bottom graph. The drop from 1989 to 1995 is the real thing; if you'd bought at the peak, you would've lost 2/3 of your investment, and that's not even counting the buy/sell spread. Doesn't that spike correspond to some sort of tax-law change that had lots of people buying coins for retirement accounts -- or, more accurately, didn't the drop correspond to a law change that stopped that practice? For extra credit, somebody should overlay that second graph with inflation data.
Wow, those are interesting graphs. 7.5% is a really small amount for them to go down during the crash, I would have thought it was way more. Although, you wouldn't have gained anything on the way back up either. I think it would be tough to do an overlay of the second chart, because it looks like it starts at something crazy small like 10, 100, or 1000, making the percentages off. I know we have pretty bad inflation right now, but its not THAT bad, lol.
Yeah, and that's the market as a whole. No, had nothing to do with that. That was the period that Wall Street got involved and started creating indexes (based on coins) that traded like stocks. People that bought coins in '88 through '92 lost a lot of money, not just those that bought at the peak.
Pretty interesting graphs, I do find it strange that of all the collectible markets, coins would drop that much. I follow other collectibles and even through the downturn of the economy they are still going strong. And was wondering, will there ever be an uptick in the hobby of coins?
Well I am seeing very strong downturn in prices of collectibles overall during this recession. Stuff that used to be $1000 is lucky to find a buyer at $200. Bad economic times are bad for luxury items. The thing not mentioned about "profiting" from coins is the losses by overpaying, buying problem coins, and just the general buy/sell spread that tends to destroy most investment potential of coins. About the only coins you have a shot at making a profit on as a collector is either bullion related or holding for decades, long enough for inflation to overcome the massive buy/sell spreads.
Yup. In a nutshell. And we've been in bad economic times since about the year 2000. It would be interesting to see what the market could do if we ever see good economic times again. The population is growing but people aren't making much, if they have jobs at all. Theoretically this should be a great time to be picking up coins at deep discounts. The only thing making it difficult is constantly rising PM prices. They may fluctuate wildly from day to day but gold is consistenly up year after year. If you sign up for a free account over at NGC, you can get access to their price guide. Every price at every grade is clickable. You can look at 1 to 5 year charts by clicking on the value at the grade you're considering. Prices have went in all directions. It just depends on the coin.
Coin values have been going up during the past 20 years. The next 20 years? Who knows. Will the best coin performers from the past 20 years be the best for the next 20? Unlikely. Much of the increase in coin prices has been fueled by increases in the price of silver and gold. While some numismatic coins, such as most key dates and early type coins have done very well, some others have only increase a bit or have been flat in price. Some series such as classic commems and top pop Franklins are actually down in price. What happened in 2008 was that liquidity dried up. Many dealers held their asking prices firm, but lowered their bids if coins were offered to them. So a nice 1882-CC might still have been $280 at retail ask, but maybe $140 at wholesale bid cash offer, instead of a closer in number in a more normal market. As always, how well a collector does financially tends to correlate with their grading skill, access to coins, and market knowledge. Be above average in all three skill areas and that person will do well financially. Be below average in all three areas and that person is almost sure to lose money. The average numismatic coin collector might be at break even after five years. The other thing to consider is that most of the money is made by dealers.
While that may be true for some items, vintage baseball cards and comic books have gone up on the secondary market. Certain comics have risen sharply in the past year with some modern stuff spiking at more than $500 in one month.
