Retirement......numismatic coins saved....

after 40 plus years and retired the answer would be invest in a 401k I did works better than my coins would have the only way my coins will make money is after the kids get them they paid nothing so what ever they get will be a profit savings bonds did not help as they don't pay much on the return collect for the fun

 

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@World Colonial Coins are ultimately a luxury item and since I expect most people to become poorer or a lot poorer over the indefinite future, longer term I concurrently expect most of them to lose value, at least measured in constant value.[/QUOTE]

Exactly! Coins are Luxury items. From where I sit, I would think most hobby's are luxuries, unless it's your career. Only disposable income on luxury items and hobby's.

 

Great....so you are into coin collecting? Or is it because you like to see if your coins will be a good purchase in the future (like taking a gamble)? Just wondering,... and I think it is great that you enjoy being a numismatic.

 

my father got me started 45 years ago when I was 15. My first coin was an 1879 Morgan beat to hell but fascinating. I'm trying to get my daughter interested but no luck for now. I could try to get my grand kids interested when they get older, we'll see.

 

Wow...45 years ago...you must have some collection. Can't understand why anyone wouldn't be interested in your collection...it must have sentiment and also be of good value. That's great!

 

let just say after going to many shows through the years I have a lot of dups because when I see a piece I like I buy. A Habit ?

 

There's another big risk when it comes to looking at coins as an investment. If you become sentimentality attached you'll end up being burried with the "investment". You see it all the time on American Pickers. Collections worth 7 figures in their entirety yet the 70yo owner won't sell a $200 item. NEVER become emotionally involved with investments period. The day that happens is the day you need to sell everything off and start fresh. Emotions and money need to stay far away from each other

 

To me it's an enjoyable venture. With age the value increases, they are an inanimate object,

 

Tell that to people who petition for a marriage license to marry their cars or vacuums etc lol. And I'm not being facetious, it happens more than you'd think

 

well now that sux !

 

Marriage license to marry cars, etc... I have noticed that some people are doing a lot of absurd , outstanding (but not in a necessarily good way) things....Life used to be a lot more interesting, a lot simpler. The absurdity that is out there and all for what? Easier to collect coins than to be bothered marrying one's inanimate , material , possessions.

 

Is there any investment that ISN'T a form of speculation in some way?

I'm strictly a collector. (Since 1972) Don't really care if the value of my coins go up. In fact I would probably be happier if they went down because then I could buy more.

 

Being on CoinTalk and seeing people cataloging, indexing, etc. their collections kind of makes me feel inadequate. I don't know most of what I have or what I paid for it. I do collect because I like and if I or my kids sell it off at some time in the future, it will bring what it will bring.

 

In a lot of cases that sort of obsessive need to organize tends to accompany the love of numismatics. I look at people like that with a mix of envy and horror.

 

Yup

 

We need to keep in mind that stocks, bonds and bank deposits generate income in the form of interest and dividends regardless of whether or not their trading price increases or decreases. Commodity investments, which would include coins, do not generate income and are purely speculative in nature.

Just think about gambling in a casino. If you do it a lot, the law of averages says you will lose, because the rules are skewed toward the house. Coins are a lot like that as you have Ebay fees, dealer commissions etc. working against you. However, if you invest in the economy and the economy is growing 2 or 3 or more percent per year, the rules are skewed in favor of the investor, especially considering that brokerage commissions are a lot lower than the 13% that Ebay takes when you sell something (or more if you sell back to a dealer).

 

Wish I have spent more money on coins during the past 15 yrs instead of buying BK stocks... At least with coins I'd get to hold it in my hands.

 

Simon,
Coin collecting is a great way to build an asset separate from all your other investments. It also adds diversification to your investments. It is best when you also enjoy it.
They are great protection against inflation but not against deflation.
They are hard to secure unless you get a safety deposit box. But you would be better off using the safety deposit money to buy Utilities stocks through your phone or power company.
There are a lot of sharks out there who want your money and therefore you must be very knowledgeable about coins.
If you are in it for the money, buy only key dates and coins that are undervalued.
Do not buy from dealers or the mint, buy from the public. Hunt through change, there are a lot of valuable coins in change.
Advertise that you will buy collections.

 

The income flow from the vast majority of stocks in the form of dividends and debt from interest payments is an absolute pittance. This is the result of the asset, credit and debt mania.

Debt instruments have never been more overpriced, especially considering the stable rags which pass for balance sheets in today's environment. In return for taking unprecedented historic risk, "investors" have accepted the lowest returns, ever.

Except for January and March 2000, stocks on average have never been more overpriced either. The dividend yield is as low as it has ever been too, once again except for January/March 2000 and maybe October 2007 right before the "Great Recession" meltdown. To provide one indication of how absurdly overpriced stocks have been for so long, the only time prior to the late 1990's that the Dow yielded less than 3% was at top tick in 1929 and in October, 1987.

Corporate balance sheets are also about as weak as they have ever been too. Since 2009, the data I have seen shows that in the aggregate, the S&P 500 has distributed more than 100% of its reported profits through dividends and stock buybacks, even though the dividend yield is an absolutely pitiful 2%+. Many companies (such as IBM) have paid out more than 100% of their earnings by leveraging up. Collectively, they show record "cash" on their balance sheets but much if not most of this "cash" is actually another corporation's DEBT.

Until recently, I always wondered how it might be possible for stocks to suffer a meltdown greater than the 1930's (at least in real money) based upon the "fundamentals". The combination of unprecedented financial system leverage by governments, households and yes, now corporations means that in another financial crisis, corporations will be cutting or eliminating dividends at a much faster rate than they did in 2008 when supposedly "rock solid" companies like GE and Dow Chemical nearly went bust.

Coins are more speculative than mainstream asset classes but the latter have never been more speculative than the last 15 years. The economic foundation supporting the debt structure and corporate earnings is weaker now than its ever been and this house of cards won't be able to sustain its financial levitation act forever.

 

The evidence I have doesn't demonstrate coins provide protection against inflation. In the 1970's, the Red Books I own show many exploded but the big difference between now and then is they were much cheaper compared to both the incomes and the asset bases which "average" collectors used to buy them. For the most part since the 70's, my explanation is that coins are correlated to general prosperity and with some series, also to metal prices.

Today, except for bullion substitutes such as Morgan dollars and generic US gold, I wouldn't count on coins providing an inflation hedge, certainly not the "investment" coins in higher grades selling for what are actually nose bleed prices. I would expect most of them to gain nominal value under a repeat of 70's type inflation but probably be (huge) losers in "real money" terms. I don't follow the segment closely but I have read from others that the premiums to bullion for generic US gold fluctuate all over the place and it's easy to underperform metals or lose money even when metal prices are rising.