How would you put together a diversified coin investment portfolio?

Certainly selling coins one at a time can realize significantly more return although it can be a daunting task. I plan to liquidate my modest holdings in 10-12 years when I start retirement. I have complete sets of Morgans, Peace, Gold type and a dollar type set. The thought of selling one at a time would be total pain.

 

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As a rank amateur I would say holding for a year is still churning. With any investment, you need to have a realistic horizon. With the inherent value of most coins in the precious metal content - and second in the rarity - a year will make little to no difference, and could put you upside down if gold and silver continue their downturn.

With the economy just recovering, people are not buying risky investments - and I would consider rare coins to be in that arena. The long time collectors like myself have been using the downturn to stuff their stockings (at least I have) with no immediate plans to sell. Like most - it will be extra money in retirement, and part of a broad range of investments I've made. I've had some nice windfalls that I've gained through time and effort - selectively buying raw coins and learning to grade them beforehand. The coins that I've purchased at "retail" after being graded are all probably down in value a bit. I've expected it, I've been buying the down slope with a long term goal and horizon.

I don't know how long you'd have to hold them - if I did, I'd already be rich selling psychic readings. I do know that if you have a plan, shop carefully and take some risk in ungraded coins that you grade yourself - you will at least return a modest profit for your time and effort when the time is right.

Keep in mind that the boomers that have the high value collections are also now liquidating to supplement their retirements since a lot of them had 401k's that turned into 201k's along with all of the recent inflation. Consider supply and demand laws.

Collect to collect, nice coins will always be worth good money, but they are not a short-term profit strategy like....say...Enron stock - or real estate.

 

Probably as individual coins. I think with the typical collection most dealers looking to purchase will total up the money coins and toss in a token amount for the rest of them. You can make more money selling them individually but then you have to put the time and effort into selling the "other stuff". Not always an easy or quick proposition. That's why the dealers don't allow much for them when purchasing a collection, because HE is going to have to do the grunt work and he needs to be compensated for his time and effort.

 

This is one of the key "aha" moments one has as one moves from beginner to intermediate collector status. It bears repeating often.

 

Even if the coins are worth 20-40 It still is hard to meet the same percentage.

 

It is the game of business. How good are you?

 

The first part of the Pouge Collection just sold on Stacks and Bowers. It realized $25 million. The Pouge family had purchased many of the coins in the 80's and 90's and paid about 10% of what they yielded. So I guess if you want big returns, only buy $100,000 and up coins, then hold onto them for 20-30 years.

 

sounds like a plan.


uh, can I borrow a few $100,000's?

 

About ninety percent of everyone who ever made money on any hobby bought during the 1950's and sold during the 1990's and before 2001. Mostly before the creation of ebay when things lost there value because people found out there were a lot of things originally thought rare, wherein reality there thousands and sometimes million of the items left.. eBay was officially open to the public in 1997 so that will give you a time table. I think coin collectors could learn a lot from the Beanie Baby area. I remember going to baseball card shops and seeing old women, men and children buy those things by the bag full. I'd hate too imagine how much many of them lost money wise.