A Take on the coin market.

For decades, it has been known that coins that are of the highest quality are the best investment, because they keep a hedge over inflation and become more and more desired over the course of a persons lifetime, a trend that has been true for many many years. The question is: will this trend continue? In my opinion it will not. This is because, one reason why these coins have risen in value so much is due to the increased specification of what defines quality in a coin, and this its price. With more grades being included on the grade scale, and increased factors that are having larger, and larger effects on a coins value; to the point where not much more differences can be identified in coins. Also, because these coins have been so profitable over so many years, they are starting to cost so much money then a normal collector can afford peoples. Taking into consideration, that new coin collectors are fairly young the trend will not be able to continue, simply because there is a decreased amount of people that can spend thousands and thousands of dollars on a single coin. In my opinion, higher quality coins that are worth between $50-$100 will make a better investment over the course of time in terms of percentages, simply because they are more affordable, when compared to very rare coins, that can cost thousands of dollars. This idea is simply from my perspective and opinion, what do you all think of this?

 

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Interesting idea worth mulling over. One thing, though: the US has had no problems generating young wealthy people. At the same time, the income level where your $50 to $100 coin might appeal has been stressed financially now for more than a generation -- and maybe couldn't care less about collecting.

 

I don't believe the current trend of widening price spreads will continue for the highest graded coins either, across the board. Most of the coins are too common, many are not really competitive versus the alternatives in the same price range and the current and potential collector base is likely to be worse or much worse off for the indefinite future.

 

It's has long been called "The Hobby of Kings" for a pretty good reason. Other than collecting on the low end of the market, most that buy the High dollar, rare (not ebay rare)top end coins are mostly the older generations that have worked hard, saved and invested wisely and budgeted to be able to afford purchase such coins.

There are some coins that a buyer may partner up with others to buy and own a share of said coin.

While I don't agree with using the word "investing" along side of "coins"
Coins have gone up and down over the years and the swings will continue, The few that have become investment coins have always been out of reach most collectors. Yes one could say x coin was worth y in 1940 and worth xx today. The problem I see is when people make them comparisons don't take in consideration what how much x took to earn and it's purchasing power of the time. Or I paid I paid $100 for it in 19xx and sold it for $175 in 20xx think they made $75, where they don't take in inflation and other factors that gave the dollar less purchasing power,

 

Personally, I intend to be part of the group which fights to keep numismatics popular into the future, rather than part of the group which does nothing but wring its' hands and lament its' death. If you think it's beyond your control, well, it probably is. I don't think that way.

 

I don't believe things that are common by nature, such as $50-$100 coins, ever have much potential as a vehicle for growth, regardless of the changing population of collectors.

 

A decline in the price level for the most expensive or highest graded coins would hardly mean the death of the hobby. This is what I interpreted to be the focus of the OP. To my knowledge, coin collecting remains very popular or reasonably popular in other countries despite the much lower price level.

 

For US coins outside of a specialization, I consider this correct.

 

Agreed, but I feel the only rational cause for any sort of significant decline in prices would be a decline in demand, therefore fewer collectors. So I'm approaching the answer as if the two issues are interconnected.

 

I believe you have a short sighted view of the market and limited experience. Sorry, but I'm calling it as I see it.

I also sometimes wonder after seeing the price trends, if some people say this with the sole intention of shorting the market with fear.

There are bullion grade coins out there. Worn out common dates by the millions. We all know this. These tend to ebb and flow with the price of metals. Some end up in collections, a lot end up with stackers.

People will always collect historical items - and that is exactly what coins are. Historical items. They tell the story of "us" (and technically in this country - us is U.S. !).

Things rise and fall in popularity over a lifetime, and then there are floods to the market for profit motive that saturate it with false hopes of getting rich (Think about Franklin Mint and all the coins from Liberia).

Coins to me are about history, just like stamps, books and other collectibles. They teach a lesson about the times, how and why designs came together (or fell apart), and what the external influences were that drove the coins of the era.

If you are down on numismatics and see failure and dark times in a collectible hobby - maybe it isn't the hobby for you.

What I see is that you are starting a business based on numismatics, and just as an objective recommendation - you shouldn't discount the hobby you are starting a business around.

If you are just in it for profit, there are many other ventures that will be more profitable for you and require less dedication.

Last, we have had a phenomenon called "da inner-net" that has turned a lot of hobbies on edge.

Things that we thought were very rare are no longer as rare, because we can find them across the globe. Some have had harder times adapting than others.

This has led to a huge supply glut - and combined with the baby boomers estates, it has compounded and driven prices way down. This is just natural market economics.

Values change over time. Yesterday we were in a winery and the tasting steward was obviously proud of her "bling" watch - which was nothing more than a gold plated quartz movement from China (or wherever) but it had MK initials in the dial - thereby signifying Michael Kors or however it's spelled. This - like the Seiko gold plated watches of the 80's will end up on Ebay for a few dollars next decade.

However a 1960's mechanical Omega or Rolex will always garner a high price due to craftsmanship, reputation and rarity. And century old pieces will continue to appreciate as collectible time pieces.

 

Supply and demand! It is important to pass on this great hobby to our future generations.

 

There is no shortage of new wealth and people that can spend thousands and thousands on a single coin have no shortage of money.

The high end market will do what it has always done, ebb and flow depending on the sale timing and how many people at that level are interested in the same item. Overall though there is no reason to think that that part of the market won't continue to flourish.

As far as "cheap" coins in the 50-150 dollar range being good investments, history would say otherwise. It took many of those coins over a 100 years just to get to that price point, for the most part that means that there are more of them then people collecting them. Common things will always be common unless the whole world gets interested in them or a large percentage are unexpectedly destroyed. This is also the group of buyers that is most affected by economic conditions and the first coins to drop or stop selling in stagnate to down markets.

People have been predicting the demise of the coin market for probably as long as the market has existed. True investment coins will just fine, higher end coins will be fine, "cheap" coins are the ones with the biggest risk when it comes to market factors. Really the only real threat to the top of the market is other examples becoming known.

 

I believe many "higher end" US coins won't necessarily be fine price wise. With the highest grades where the (supposed) differences in quality are either trivial or imaginary, there isn't any reason why the price spreads can't contract reducing their market value, even if collecting more or less continues as today. The prices seem to be primarily a function of TPG and registry sets and how one or both are viewed is subject to change even if neither go away.

There are also many actually scarce or rare US coins with high or astronomical price tags which don't really have much to distinguish them, outside of their market value, This is applies to many six and seven figure coins today.

The US price level for the higher/highest end is also significantly a function of financial conditions and to make a mild understatement, they have never been as favorable as the recent past. I wouldn't count on this lasting forever either. All asset classes have been inflated by the asset, credit and debt mania.

I do agree with you about most low priced coins though. Most are common and the price should continue to reflect it.

 

It is possible that the owning of "trophy coins" will fall out of fashion. Every once-in-a-while, the appraiser on Antiques Road Show would say something like "Ten years ago that would have easily sold for $25,000, but the demand for that type of [vase, painting, furniture ...just fill in the blank] has dropped, and now you would be lucky to get $10,000." The same could happen to coins, though I don't see much sign of it happening yet. Some high-priced rarities have failed to sell recently, but that has always been happening, and in the past they have always seemed to sell at a record price eventually.

 

I wouldn't consider any US coin valued up to $25,000 a "trophy" because given the US price level, I can't think of a single one which is actually distinctive. However, from comments elsewhere its apparently US collectors use a much lower standard of significance than I do.

Since apparently "trophies" are so numerous, I use the term ultra elite instead where I once identified 29 with a somewhat lower number as honorable mentions. An example by my standards are any of the 1792 federal patterns, like the Birch cent.

As an example of coins which I don't consider actual trophies but still certainly scarce and desirable are numerous Liberty Seated dates. PCGS contributor "Roadrunner" has commented numerous times that the "key" date circulation strikes have lost value since 2008 (or near it) and I have noticed the same thing for pre-1858 proofs.

 

Quality will always hold its value over low end. And especially coins with great eye appeal the people with the money to buy will always buy the best they can afford or find. I found this in my other business of early American furniture. The middle and low end the bottom fell out. And the higher end is still selling but at adjusted prices. Things that 15 years ago were 25k will often sell today for 10k. But things that sold for $1500 are selling for $200 and begging for buyers. Many that couldn't afford the upper end can now especially if they stretch. So they don't just want common stuff

 

I get the NGC weekly market report and find it interesting just over a short period of time to see how $5000 coins drop to $3000 and some $3000 coins jump to $5000

 

If your referring the 04 and 22 Police coins the bids were record prices but reserves no meet

 

Us Population is projected to increase to over 400 million by 2050. Being that the supply of $50 to $150 dollar coins and the high end coins for that matter is static - I expect upward pressure on prices over and above inflation.