Liquidity question from a beginner

Hi, Just getting started in collecting. I want to be totally honest with myself and say I am not 100% sure I will keep the enthusiasm for collecting 5 maybe 10 years from now. I hope I do but you never know life happens. So I want to start with something that would be easier to get rid of if I decide to Just starting so I can go any route, I really like almost any older issues. Do you think higher grade more common dates would be easier to sell or lower grade key dates or error coins. My first purchase was a 1883 cc Morgan ms66 so I went the common date with that one. Reading up some I like the barber stuff and looks maybe I could afford higher quality in some key dates in some of them so maybe best of both worlds Do the barbers have a good following and trade alot? Any other recommendations on something that might be more liquid? Thanks for any responses

 

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Hey welcome to collecting and CT..... Yeah, higher grade coins are always more desirable and as a result easier to liquidate. The down side is the potential swing in prices. Losing 20% on a $100.00 coin is far more destructive than losing 20% on a $20.00 coin. Yes Barbers are a popular series to collect. I am not a Morgan dollar guy, but there are plenty of nice Morgan’s out there for very reasonable prices. Everyone loves Morgan’s and they are quite easy to move when the need arises. With silver so cheap right now a Franklin collection is somewhat easy to build and quite easy to sell. Not many ways to go wrong. Only caution that selling any coin collection will probably result in a little financial loss. But coins are a great way to store wealth for later.

 

Honestly, a beginner needs to go slowly if looking to spend "big" money on coins. There are lots of pitfalls out there. Also, the coin market cycles, and no one can really predict the future. That said, good looking, eye appealing coins are almost always easy to sell. And fun to own too. Doing a type set can perhaps spread risk and give you more time to settle on a series you are enthused about.

 

That's an expensive piece to start out with. Don't they go for $600+

Coins are one of those things where you collect for the enjoyment first and the "investment" second.

The thing you don't know, is if you overpaid for something. Many new collectors over pay many times. Many business coin ppl who evaluate collections come across ppl that have overpaid for stuff they've bought and will never get their total investment monies back.

If demand is high for something since you've bought it to the time you sell it them you'll be okay if your total acquisition price is in the fair market value. But if demand dries up or stagnates and valuations drop, well, then you may be hard pressed to find a buyer at a good amount.

Then it depends who you sell it to. A dealer will only give you a certain % of market value, many ppl are looking for a deal and not overpay, some ppl just bid things up like crazy. So the venue you sell it in is key, and so is market timing.

Then it also depends how quickly you need/want to sell it. For instance if one needs to sell something *now* they tend to go to a pawn store in which they'll get a small percentage of what it's worth. If you have someone sell it for you at a much higher price then you'll pay fees to that, which with time, etc may have just been better to pawn it. LOL

And of course money is 100% liquid instantaneously if you spend it at face value.
So to answer your question .. it all depends.

 

I would caution you not to try to buy anything until you really know what you're getting into. The fact of the matter is, very few people make money in coins. Those that do capitalize on their knowledge of coins. If you don't know what would make for good liquidity, than the answer at the moment is: nothing. I haven't personally cracked the egg on this question, so I won't pretend to have the answer. My approach has always been to buy collectible coins as close to melt value as possible. If I really like a coin, I'll pay what I feel is reasonable to acquire it. I separate my hobby and investment funds as well as my hobby and investment coins. There are some websites that assist with determining value. Looking at historic sales could help, but supply and demand is not easy to predict, previous success does not mean future success, and when new and higher grade coins are found, those higher grade coins quickly lose value. Here are some websites you might want to peruse for a while before jumping in and buying big coins:

http://www.pcgscoinfacts.com/
https://coins.ha.com/?ic=breadcrumb-coins-121913-interior
http://www.numismedia.com/fmv/fmv.shtml

 

Just remember that ⬆ and proceed accordingly.

 

Problem-free higher-grade (xf and above) classic US coins in PCGS holders are the most liquidable.

Raw problem coins are the least.

 

Key dates, especially lower-grade ones, are doing poorly right now

 

Two examples that may help when it comes to liquidity and coins.

Late 1990’s I made a little money and went about purchasing all the old gold coins I could find. I never could afford gold before and I went a little crazy. Now twenty years later, if I liquidate that gold I will make quite a tidy return. That was simple dumb luck. Nothing more.

Now here not too many years ago silver began a sharp rise. Again I got feverish and purchased rolls and rolls of cull Morgan’s and ASE’s. Silver was between $18.00-$22.00 at the time. Well now silver trades in the $14.00 range. Not a very good investment for me.

In either instance, I had no way to gauge what would come down the road. And for me it doesn’t matter. This isn’t investment funds for me. Granted if I lost all in some disaster it would offer me a bit of a cushion.... But these purchases for me are set aside for kids and grandkids. So performance isn’t a great concern. But point is, regard coins as a hobby, not an investment vehicle.

 

Thanks all for the great replys! I don't consider it a investment but like metals and such and wonder if coins would be more stable than just gold and silver bullion? I guess I want to start with coins because they are more interesting than bullion and not fluctuate as much? My timing on starting to buy silver was not so good to say the least as my first purchase was about 30 a oz ‍♂️. Just hope when I am old they have some value to give to kids or grandchildren or if they don't have interest some value to sell.

 

If you want to buy gold and silver and collect coins, I would tell you to keep your purely precious metals plays and your collectible coins in two separate “piles” so to speak.

I buy American Gold Eagles as a hedge in my investments. My collectible coins are bought for fun and enjoyment. The two — with me — don’t cross and mingle.

 

One more thing that isn’t mentioned maybe as often as it should be..... These days most anything is collectible. From baseball caps to old cars. The thing about collecting coins is that they are mostly comprised of precious metals. And in the end they are all US legal tender. If you were a collector of buttons or baseball caps I would tell you there’s a very slim chance of seeing much of a return on your collecting investment. But hey, what can be wrong with collecting money? It’s always at the very least worth face value!

 

I have to respectfully disagree with you Randy, at least to some extent. With a common series plentiful in MS such as Morgans, Peace, etc, you're generally right. However, this does not apply to all types, nor does an assigned grade automatically indicate a more desirable coin, and this is particularly true with the ever-growing number of maxed-out and/or questionably graded examples ("hot potatoes").

What is always desirable and long has been the easiest to liquidate at strong prices is quality. I'm not suggesting this the case with you, but many folks assume grade to be an indicator of a coin's quality and I suppose it is to some extent, but not as much as some think. A high quality, high eye-appeal, truly original coin of a lower technical grade absolutely can and often is more desirable than one of a higher technical grade, plus has the inherent benefit of possibly, even likely being able to sell itself.

One can also try thinking for themselves instead of existing as the lemming collector the TPGs love so much. One quick example of this could be Ty II SLQs. Most simply assume FH designated coins to be cream of the crop when the fact is that if one cares to look they'll often find full heads on otherwise unimpressive examples with a mushy escutcheon or nearly non-existent (partially) shield rivets. Would a wise collector (not playing the registry game) be better off sticking only to examples deemed FH by the TPGs, often paying a premium for it, or by searching out a truly special example displaying a nearly FH but also a full shield and well-detailed escutcheon, possibly for a fraction of the price? When it comes time to sell the average collector may not know or understand the difference, but the knowledgeable very well may recognize the opportunity and be willing to pay up for it. The "best" coins a dealer gets rarely need to make it into their case or on their website (or whatever) and for good reason.

 

Have kept to amateur style collecting for a couple years now unless & until my finances improve. One of the best tips i have heard is to be very cautious of buying "silver" coins from areas such as China due to high group of counterfeit coins that even pass the "magnet test"! Coating a lesser worth metal coin with silver can make it pass the magnet test.

 

Any other recommendations on something that might be more liquid?]
You have received some great replies so far. My suggestion is to be very patient, learn as much as you can before you make your purchase(s). Nice coins will still be there in a month, in a year. Learn how to identify coins that have not been dipped/cleaned. The coins that are most liquid are not the ones that may be the most interesting or that will provide opportunities for gain. It's very easy to buy and then sell an American Eagle Silver Proof Dollar, but that may not be interesting to you. Find some types of coins that you like, go to coin shows and look at dozens and dozens of coins in person. Ask questions. Once you buy a couple coins, take them to a coin show (or list one on eBay) to see if you can sell them for close to what you paid. If not, you may be paying too much. Be patient, enjoy coins as a collector.

 

You can always sell your coins, but if you sell to a dealer expect to loose 10-40% off the top of the price you paid for a coin. Dealers have to make money on coins. You might make money on coins if they are very rare and have great eye appeal. It is hard making money on coins unless you do it for the very long haul like 20-40 years and even then gains are not promised. You should really collect coins for thee enjoyment out of it and not thee investment part. If you are in for thee investment part you will be disappointed when you go to sell the coins.

 

This is exactly how I look at it. As for liquidity, I haven’t had any problem selling US coins, both certified and raw, for close to what I paid for them on EBay. That’s with average photography skills and not a high number of total transactions on my account. I prefer certified partly because they are potentially more liquid or at least trade in a more predictable range. As for raw coins, the price you receive on EBay could fluctuate more depending on how accurately you can photograph them. Even with poor photos a certified coin will likely attract more bidders.

 

Pick something that you like, and read extensively about it. Start with common dates until you get more experience and confidence about all the following below:

Why is this person/image on it? Why did this series start and end (if it did) when it did? What years/mintmarks are rare? Are there known counterfeits or altered pieces? Were any dates not minted (and if so, why)? Were there major or subtle alterations to designs or metals (types/varieties)? How do you grade these? How did these tend to wear over time? What attributions are there, if any (full steps, full head, full torch, RD/RB/BN, etc)? How have AU and MS grades auctioned for over time, and how to I check that info out? What are local dealers in your area selling a lot of?

These are all helpful to know before you start getting serious at the start.

~Joe C

 

One risk, of course, is that you may not be able to find that knowledgeable buyer when you need to sell.

Suppose you managed to land a superbly-struck but not-quite-FH SQL at a great price, because you had the discerning eye, but no other buyers did. When you go to sell, your buyers are that same undiscerning crowd, minus you. How will you get what the coin is really worth? Especially if you can't afford to wait months for the right buyer, or worse yet, if it's being sold by an heir who knows less than the buyers?