First Time Investor

Hey
I am currently a student, but I have some money saved. I would like to make an investment, but I am not sure what kind? I am thinking somewhere around $1000 to invest. This will be my first investment (first of many I hope). I am open to any suggestions. This is money that I don't necessarily have to have immediate access to either. I have thought about doing lots of things, but I am not sure what is the best. Everything from buying a valuable coin and holding it, to mutual funds, and stock market.
Thanks for any suggestions

 

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I am buying the unc first spouse coins (but not for just investment). Do not just dive in with buying coins, read a lot, spend some time here, go to a couple of coin shows with no money in your pocket. Learn about grading, look at a lot of coins on Heritage and Ebay.

A roth IRA is good also, read up on those and try a discount broker.

 

If you purchase the lowest mintage modern bullion from the mint you will have an amazing collection someday. The mint right now is releasing some of the lowest mintage coins in nearly a century, those are the ones to buy. Gold, silver, or platinum.

 

Well I am on the same boat. I am a student as well. I started collecting coins about a year ago. With very little money I have amasted quite a collection. As I understand it is a great time to buy Franklin Halfs Slabbed MS 63 64 65 66 FBL (Full Bell Lines). Some may disagree but my personal favorite grader is PCGS. I was reluctant to read about coins but there is a lot of knowledge that is worth reading about coins.

 

I don't invest.
I don't even know HOW to invest, i.e., how to evaluate various things for investment potential.
But through reading I believe the conventional wisdom is that numismatics is not the way to go.
Can you acquire investment level coins?
Yep, but you won't know which ones until 10-20 years after you've bought.
I believe the advice from "those that know" is to look elsewhere.

 

Well, I commend both Stumpy and Hull -- I wish I had been so forward-thinking and investment-minded when I was in college. However, I would be very careful to invest in coins on such a limited budget. Most good financial advisers and also quite a few good coin dealers will tell you that no more than 10-20 percent of your investments should be in rare coins or precious metals. They should be a hedge against the rest of your investments but not the principal part of your investments.

Hull, I have a few Franklins -- I like them but they are pretty dead as a series right now (maybe a good time to buy, I don't know -- as an example they've been saying the same about commem's for years now and they're still dead). PCGS is the best service, at least for being able to re-sell the coin on the market.

Good luck to both of you. Glad to see we have some youngsters in the hobby (we need more).

 

In a word: Don't!

That is, don't invest in coins.

Anything but.

Collect coins.

Invest in:
Your future, a bank account, the stock market.

Anything but coins!

 

Well they are supposed to skyrocket. Right now they are almost bottomed out but are expected to shoot right back up. I don't have any except for one that is not worth much more than melt value.

 

What?

That is, what or who is 'they'?

Coins?

Possibly.

Or possiibly not.

 

No, the Franklin halves are.

 

I agree with Treashut..........don't invest in coins. Buy 'em 'cause you like 'em. In my opinion, buy silver bullion bars or rounds from Engelhard, Sunshine, A-MArk, or NW Territorial Mints.

 

I have not really focused on bars or rounds. But, I should have went silver was really low.

 

As is often said, "Hindsight is 20/20."

When I left Alaska in March 1964, I had managed to save about $325 from my meager Army pay.
If only I had taken it in silver dollars rather than paper (silver dollars circulated at that time).
And gold was about $44 an ounce.

Okay, now that I've reminisced I'll mentally turn around and start evaluating the future.

But "war stories" are entertaining.

 

The price has almost doubled in the last year for the FBL coins in MS65 & MS66 grades.

Let take the 1956 FBL for example.
Coin Values magazine also had an inexplicable jump in price for this in 66FBL recently - from around $200 to now its listed at $800!

If you look at Teletrade or Heritage you will see the price increase over the last year.

 

Two investment people I like to read are Peter Schiff & Jason Hommel who predict the US is on the road to hyperinflation if the Fed keeps printing money out of thin air. They predict silver will out perform gold, albeit they do not have a crystal ball. Buy now !

 

Coin collecting as a investment depends on our viewpoint.

I veiw coin collecting as entertainment in the same category as going out for dinner and a movie, betting on horse racing, family vacations, field trialing birddogs and such. Just a short list of a few things I do for fun but you get the picture. Compared to most of the things I do for fun - coin collecting is one of the few the actually leaves me with something worth cold hard cash in the end. So from this viewpoint coin collecting is a great investment.

 

It would be difficult to name someone worse than Hommel as an investment advisor. Schiff is a bit better but very very self-promotional. I also expect more inflation in the future, but following self-styled gurus is the road to ruin. I would also not advise someone just starting out investing to buy coins. Instead, learn to invest in stocks [but don't learn from TV, there is nothing there to learn]. The stock market is an interesting intellectual game that isn't too difficult to win over the long run. That is where your money belongs, if you learn how to do it first. But if you must invest in coins, American Silver Eagles are probably your best bet [the uncirculated, not the proofs]. It is difficult to make a serious mistake buying them. The premium over melt value is modest, and silver has tremendous upside potential. As a kicker, someday the Mint will stop producing ASEs and they may develop more significant numismatic premiums than they have now.

Good luck.

 

Collecting Coins (Bullion too) is a Great Investment.

I would NOT put my money in a savings account or a CD Account. You're more likely to find more money in pennies lying on the ground than you would get in a year's interest.

When collecting coins, I try to buy silver at melt price (or close) or buy key dates in Silver Dollars. Silver Dollars are a good way to go because there is always a strong demand for them (rare dates and bulk). They will always retain thier silver value at least. Stocks wouldn't be to bad either. If the economy improves, the stocks will rise and you will make more money. Thats just my advice

 

You would do well to buy into a fund. Suggest a Vanguard or Fidelity and now is the time to do it. Both have great Websites.

 

Before you invest in coins you need to understand a few things about buying and selling coins.

1 - Coins are not commodities. A share of stock in a company is identical to any other share of stock in that company and it is very easy to look up that stock's value. But all coins are different, even coins that have been graded the same by the same reputable TPG. That makes placing a value on a coin more difficult than for a stock.

2 - To make a profit on your coin you must overcome the built-in costs of buying and selling coins.

Suppose you buy a coin at auction and later sell it at auction. When you buy the coin you pay a 15% buyer's fee on top of the hammer price. Add to that S/H costs. When you sell the coin you pay a 20% seller's fee (and the S/H costs).

Let's do a little math. Assume your winning bid was $1,000 for the coin. The juice (buyer's fee) is $150 so your actual cost is $1,150. Throw in $25 S/H and your total cost is $1,175.

Later you decide to sell the coin. Assume it costs you $25 S/H to ship the coin to the auctioneer making your total cost to date $1,200. The winning bid would have to be $1,500 just for you to break even. That means the hammer price of the coin had to increase 50% - FIFTY PERCENT - just to cover your costs of buying and selling the coin. For you to make a profit (which is what investing is all about) the hammer price of the coin would have to increase greater than 50% and your profit would be 80% of anything above that amount.

That doesn't sound very promising does it?

It doesn't get much better doing business with a dealer. The dealer has overhead costs he has to cover and he does that by buying coins at wholesale and selling them at retail. The coin he sells you at $1,000 he may offer to buy back at $700 or $750. Again, your coin would have to go up quite a bit in value for its wholesale value to reach its former retail value.