Need a little help on a dicision...

Why the split between collecting and investing?

I think that coins are imbued with subjective meaning by the collector, as such they take on a symbolic significance that reflects the psychology of the collector -- that is, they become a family keepsake, a relic, or piece of numismatic history (whatever the collector decides). Coins become abstractions (no longer "change" or money ... and not just a commodity either) in the case of collecting. But also, a desirable coin (as defined by high demand, and typically, high prices) becomes symbolic of the collector's numismatic prowlness -- their connoisseurship if you will. Part of this latter brand of symbolism includes being savvy enough to make a good buy, to recognize rarity that will result in high prices in the future. This too is a process by which coin collecting (and investing) is imbued with subjective meanings. All of this psychobabble is part of the collecting life ... but sure, some folks lean towards the numismatic market side of the coin, whereas others revel in the history and animism that coins provide. I would argue that the term "hobby" does not adequately discriminate between collecting and investing, but rather the "thrill of the hunt" and the "creation of sets" is more of a discriminating factor between the two ...

 

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Maybe rare was a poor choice of words, it should have been key dates and semi-key dates

However some rare coins on my US list would be (not including pattern cents):

1913 Liberty head nickel

1804 Sliver Dollar

1794 flowing hair dollar

1827 capped bust quarter

Throw in the 1877 indian and everyones favorite the 1909 S VDB


Lincoln cents semi keys and keys avg increase in value per year 7- 10 %
http://www.us-coin-values-advisor.com/Lincoln-Cents-key-dates-for-sale.html

IHC Keys and semi keys 7-8 %
http://www.us-coin-values-advisor.com/Indian-Head-Cents-key-dates-for-sale.html


I'm pretty sure these figures increase slightly as the condition of the coin improves.

 

I agree that the case stated above by GDJMSP is accurate, but I disagree with the premise that coins are a poor investment and not reccomended.

Here is why: If you, a collector by self admission, set out to only collect coins without having a goal to make money, or without having an intent to invest money, then you should not expect to make any money, or to have a collection of coins that would classify as an investment.

By your own definition every coin dealer is a an investor since by the nature of their own intent they purposefully buy coins to make money on them.

Every person who intends to make money on coins should try to purchase coins as if they were a dealer. Purchase "desireable", "highly desireable", or "rare" coins, and or with a structured motive over a long period of time to complete a desirable collection of coins. Don't forget that you should not be purchasing anything at retail prices, unless the coin is "rare", or "highly desireable". In some cases paying more than retail is the only way you can get a premium "rare" or "highly desireable" coin. They key is that you are doing something smart. You have to figure this out for yourself, but you can do it if you want to. Also you can't really expect to instantly make money on everything, but that does not mean you shouldn't expect to make money, or expect to never be able to turn a quick profit. Often times the prospect of turning a quick profit is a great reason to buy something that is underpriced or available to you at a nice discount to market prices.

My opinion is that if you intend to invest you should be responsible and knowledgable about what it is you are doing. Bottom line is you can only fool yourself, and if you buy loads of dansco albums to fill up with circulated common coinage readily available to everyone on the planet, you obviously have not done your homework as an investor.

Also if you collect coins for years and years, and one day get the bright idea to offload a substantial portion, or all of your coins to a local dealer you have just lost. They have discounted you on the wholesale value of every coin you own, and probably know they can get all their money back from 1 or 2 nice ones you might have. Once again I would question your intent if you had this type of collection, and would definately surmise you were not an investor, but a hobbyist. Furthermore, if you had an investment class collection the likelyhood of wanting to sell your stuff at a coin shop would be pretty small.

Conclusion: If you buy Statehood Quarters, proof sets, dansco albums, Presidential Dollars, modern proof coins, America Eagles at a huge premium over spot, modern Commemoratives, common circulated coinage, Morgan Dollars that look like they have been deficated upon, and you think you are investing STOP!!!!! Take a deep breath, sell everything and learn from the loss, buy some books, and start over.

 

Shiny Little Nuggets

I agree with almost everything you said....

However; non-dealers can operate like dealers but it takes time to establish a base of coins and get to know other people who are kind of in a "group".

You can get coins at dealer prices once you find sources. Once again not easy, but possible, and you can't get everything. Obviously like you said you have to buy the right stuff, and that takes knowledge.

I will put out their that you don't have to be a super smart Numismatic genius to make money, and find quality material, but you do have to lose some before you win some. I especially like the comment about making your money when you buy the coin(s).

For people who don't want to do the leg work, and become a part of a buying and selling community there are actually investment firms out there to do the work for you, and to acquire coins on your behalf. Yes, they are going to make money, but they can save you money as well. They have much more leverage than you or I would have.

I still have to hold to my guns in that you can make money, and invest profitably in coins. The methods are numerous and proven, but as I have said previously your intent needs to be clear, and your motive defined. I do not know how many people make money or how many people don't, but I would say that most of the people who lose money are not doing it for the money. They do it for the enjoyment which is profitable in it's own way.

I think it is great that coins offer so much to so many. I'm happy with the enjoyment my coins bring me when I look at them, and I also pleasure from their profitability. -AMEN

 

If that statement summarizes your experience there is nothing else I need to say. Don't think I was arguing with you, but you have to realize that is not everyone's experience.

I don't think money is the important thing. I just have a hard time believing you could be so adamant about coins NEVER being an investment. I guess we are just from two different schools of thought.

My last statement is that there is a mountain of evidence out there that proves certain coins have increased substantially in value, and continue to do so. For example a 1909 S VDB is a good investment even at retail prices.

You have been doing this for 50 years... Please tell me if you bought a 1909 S VDB in MS 65, 50 years ago that you would have lost money.

 

1877 and 09-SVDB do not belong on that list. I see a "roll " of SVDB's and a dozen or so 1877's at every major show I attend, same with 14-D, and 22-"P"

They are not even scarce

 

I collect coins, purely for the sake of collecting what interests me most.
I don't care if my collection has dropped 5000 dollars in value within 2 years.. Because I collect them for the coins, and not for what they are worth, or could be worth.

EDIT:
and if by chance my collection Rises in price by 5000 dollars in the next 2 years.. Big deal. Its not going anywhere.. its staying right where it is, with me.

 

It doesn't really matter how many you see at a show the fact is the coin (SVDB) has been rising at an average annual rate of 10% per year. In 1950 it was worth $12 and now it's worth $8300. Basically the same sort of story with th 1877 IHC. It might not be scarce in your opinion but the fact remains that it is a highly desirable coin. The questions is not "is it scarce", but "is it going to make you money". The most likely answer is YES!

And all I have been saying is that any collector can aim to have a collection that won't lose if he/ she chooses to make it an investment....

You say most people don't do that. Ok I understand that, but a bad investment is often defined by what the masses do. The few get it right, or at the right time, or for whatever reason make out much better than the masses.

Coin collecting can be an investment and it can be a good one. OBVIOUSLY what you collect has something to do with wether or not you lose money if you sell. Who would disagree with that?????

I can't talk about this anymore. This whole conversation is like a logic vacuum.