Hi everyone! I am brand new to this site and really appreciate the sharing of opinions and information. Here's an open question for anyone who would like to respond: If you were starting to collect coins today, and you wanted to buy specifically for investment return over the next 10-20 years, what would YOU buy? Proof sets? Eagles? Current rolls? Individual higher-priced coins? I have a little cash for investment and I'm trying to get the best "bang for the buck"! *** Also, can coins be purchased in an IRA? *** Thanks much! Jon
Real estate, dividend bearing stock, foreign currency... Seriously though, coins make the perfect hobby and a lousy investment. Yes, it is possible to make very large amounts of money in coins because of the dramatic price movements but it's usually those who think like a collector who can capitalize on it rather than those who think like an investor. Investors also won't really understand all the nuances and won't insist on getting full value for his money. They'll buy what's available (and common) rather than chase what's needed in a collection (and rare). This isn't to say that you can't successfully invest as it is to say collectors always profit in enjoyment and frequently when they sell. There are many coins with solid fundamental reasons to increase. Some of these because they have a growing base of collectors and some because they are being looked at for the first time. There are huge numbers of new collectors and if you can figure out where they'll be collecting in the future there will be profit by being there first. Talk to them; find out what they're interested in. Remember that most are beginners and there can be massive changes in tastes as they learn about coins and the hobby but there are many things that won't change and some things that all collectors share from generation to generation. Whether sopmeone collect thimbles or butterflies, they always treasure quality and rarity. Seek these.
Please don't take this the wrong way, but you really should consult an investment advisor. None of the members on this site (as far as I know) are investment professionals and since we are mainly collectors, we all have our favorites that we hope will turn into good investments, but really that isn't the main purpose of most of our collections. Also, coins don't tend to do as well (in general) as other investment strategies, plus they require you to find a buyer for your specific coin when you want to cash out and that can be tricky, especially if you need to get the money quickly, whereas a stock can be sold on the market relatively simply. Now, if you want to collect, then we can be of a lot more help...
I understand how you feel, Monster, because I'm also probably about 2/3 investor and 1/3 collector. If investment return is the primary concern, and coins are what you want, I can't think of anything better than buying silver bullion coins (eagles, maple leafs, and rounds) and buy them as cheap as possible. There is a pretty good chance, but no guarantee, that silver will be higher in price 20 years from now. I've been looking at old gold coins, but if you walk into a coin shop and say you are an investor, chances are you will walk out with a $20 1924 St. Gaudens because it's considered an "investor coin," not that there is anything wrong with it. That's just the stereotype. The collectors are too knowledgeable in this arena for the investors to have any reasonable expectation of making a lot of money.
Thanks for the feedback everyone. What started me thinking about coins as investments was the dramatic rise in value of some of the proof and silver proof sets such as the 1996 and the 1999, and the rise in price of the recent nickels (keelboat and peace). I know it's probably next to impossible to "know" what's going to be a big hit, but what I'm thinking about for investment value would be the Bison nickels (I buy from the bank at $2 a roll), silver proof sets (buying direct from the mint), and the American Eagles. I like the idea of bullion. Bullion would be a nice tangible asset and silver is a lot more affordable than gold. That's definitely an idea to consider. Any other suggestions I should seriously look at? Thanks, Jon
If you want to specifically buy coins for future value, I would suggest KEY DATE coins such as the 1932-D Washington Quarter, or the 1916-D Mercury head dime. Maybe even the popular error coins such as the 1955 double die error Lincoln cent, or the 3 legged buffalo nickel. Make sure you buy the nicest ones as possible, preferrably BU already slabbed and graded.
Welcome- find your own interests... Hi monster, welcome. I echo the advice that one's primary reason for buying coins should be enjoyment and interest. There are market forces in coins that are very hard to predict. If you're in the US, the baby boomer generation is the hamster going thriough the population's boa constrictor, so to speak. Coin market has been booming for several years due to interest in numismatics by boomers (and others of course), internet sales and info, and the introduction of new coins (state quarters most notably) by the US mint. I mention boomers because they have the money and the time to get into coins, and they have, in a big way. Will they remain interested as they age-who knows... Key dates are cited by many as coins which hold their value in down markets. personally, I'd rather have a coin that I really like over bullion. Gold double eagles in low ms are available with relatively low premiums over their bullion value. Silver is a very complex play. There is tons of info out on the internet- I'd read as much as possible prior to buying bullion, and remember that experts advise only putting a small amount of investment funds in such assets. Read investment advice with an eye as to the motive of the author. Not trying to spell gloom and doom, just urging caution. There may be reasons why silver will be higher in 20 years, but there are also reasons to think it will not be much higher. Photographic use of silver has been about 25% of industrial use in recent years and will likely decline as digital photography takes over from print- but even that "picture" is complex. Personally, I don't have a clue- there are many factors from mining costs (ie amount mined has been low for the past ten years or so compared with demand- one would think that makes a clear case for increasing prices- but if there are increased prices for awhile- more silver will be mined...) to appreciation or depreciation of the dollar againt the yuan, etc. And what silver will do is an issue that some intellegent folks think about full time... Look at the kitco silver chart: http://www.kitco.com/charts/livesilver.html for 10 years and longer- one constant is that the price is very volatile... So if you like collecting ASEs for their sake, go for it. Personally, I'd pick coins that you like, and buy really nice examples. Key dates as soon as you are comfortable with grading. Good luck, and let us know your thoughts as they evolve...
Perhaps to clarify my earlier post a little. I wouldn't ever discourage someone from collecting and wouldn't necessarily discourage someone from investing in coins. I really believe that strictly investing in coins will usually not pay off and even where it does there was much more opportunity lost to enjoy the hobby rather than merely profit. If you must invest then the best way is to learn to like whatever coins you have good reason to believe will do well. You'll probably lose sight of what got you interested but in the long run you'll be likely to profit. Ben Franklin once said that the man who chops his own firewood is warmed by it twice. By the same token coins can return immeasurable profit in education, enjoyment, and resale. Good luck.
There are a million different ways to go at this so in a sense everyone is right. You must make up your OWN mind and stick with your decision as jumping around can create a mess. Personally, if I were going to invest in anything this given day it would be high grade Morgan silver dollars as THEY ARE NOT MAKING THEM ANY MORE!!! With all the masses that have joined the collecting ranks in the last 5 to 6 years Morgan dollars, especially Carson City and key dates, have doubled and tripled in value. Some more than that! Of course, as in any investment, there is a downside and that is what goes up, sooner or later, could come down and probably will. I feel very very safe buying Morgan dollars at this time but have also started looking at old currency as they are not making them anymore either and I really admire what the engravers did in the late 1800s and early 1900s. Really just want the notes to have for the little boy someday as I am afraid they will be out of sight of normal incomes some day. Pick your items, or do as many of us do, diversify! Put a little in gold, little in silver and have fun with everything else. Once you start on anything you will probably ease off of the investment concerns and just enjoy what you are doing! Hey, I hated foreign coins for most of my life and I now have one massive silver euro commorative collection, circulating euro collection and most circulating commemorative $2 euro collection. Kept asking myself why but now that the euro is about $1.30 to our dollar well it looks like I finally did something right? Guess I saw the opportunity to start collecting euro's when the rest of the world started and all I needed was a sure fire way to get them here without paying dealer prices. Took a few months but now I have my little network all over Europe. I can't get every silver euro issued but thanks to this darn computer I have managed to build a very nice collection and make new friends all over the world! And, more importantly I am learning some history and culture that I wasn't taught and I don't have to look at the same dead Presidents every time I pick up a coin!
I would advise you to consult an investment advisor before purchasing rare coins as a long term investment. Although there are numerous coins whose price trends, when viewed historically make them attractive as investments, this is in fact the exception and not the rule. In order to compute the true return on investment for coins, you must compare an investment to other available options. In other words, how would your money perform for you in placed in real estate, mutual funds, etc. over the same period of time it might be placed in rare coins. And, given the potential Return on Investment, what is the level of rish? Could any of the initial investment be lost (in other words could the coins decrease in value), or could the market soften and reduce the projected annual rate of return? There is a lot to consider here. Talk to an investment advisor and talk to some local dealers. Coin prices are high right now, if you are going to look towards investing in rare coins you want to carefully pick those coins which are historically undervalued currently. In other words, a 1916-D Mercury Dime in mint state grades right now might be overpriced when compared to the same coin in lower circulated grades. Or, you might find that rarities in certain series such as the Jefferson Nickels may be undervalued. Do your research before making an investment. TALK TO AN INVESTMENT ADVISOR and learn your options. Then talk to dealers and find some potential investments and compare them to other available options. Good luck!
cdcda, After the last ten years in normal investment circles the last thing I would do personally is direct anyone to an investment advisor! They, as well as, 401Ks have lost millions of dollars for investors without giving it a second thought. I would like to see the good folks of this nation rise up and put them all out of business unless of course we could get the laws changed to where the investment advisor, counselor or administrators had to cough up the same percentage of losses each time their clients they are representing lose money. The people up front NEVER lose a dime and can actually have a smile on their faces regardless of what the markets do. I will personally never put another dime through any kind of investment firm or into the stock market until massive changes are made, which my friend, is never going to happen. If I lose my butt in coins, gold and silver it will be by MY doing and I will have no one to blame but myself and you know I am beginning to like that feeling very very much.
Here is another thought about an approach that might work for investing in coins. If the goal is investing, then it might be smart to look for the coins that the "real collectors" will want in the future. For example, it isn't necessary to collect every Morgan silver dollar or Mercury dime, just a few of the more scarce coins or highly desired coins in the series in a sufficiently high grade to make them interesting to collectors and easy to sell at some point in time. So the collectors will be seeking the complete sets, and the investors will help them out by filling holes, hopefully at a profit. And in the meantime [which may be a very long time], the investor can enjoy a fairly diverse, unusual, but high quality collection of their own with no particular theme. But that said, where would someone get a list of key dates, scarce coins, or whatever else is likely to be sought now and in the future [excluding, of course, the one of a kind coins that are out of reach for 99% of everyone]. I don't know enough [yet] to be able to follow my own suggestion. So comments and suggestions are welcome.
You find that kind of stuff out by reading books - lots and lots of books. Of course you can also find some of it by reading coin forums
Hi Jon. Welcome to the forum. I'm in the group that doesn't think much of coins as an investment, but since I'm not a licensed investment adviser, I don't give investment advice.. Now that is a legal question, which I can answer as soon as you PM your Paypal Account information so I can bill you.
