I just posted this in the bullion forum, only to notice afterward that it is the section with the least activity on the site (oops, sorry for the double post). Perhaps it's better placed here. So here's my situation. I'm 30. I tend to be a bit of a saver by nature, but I've also been a long time admirer of the coin collecting hobby. I've decided that I want to start collecting, for a few convergent reasons, as follows (not necessarily in this order). 1. I think it's interesting 2. As my wife and I are getting ready to try to have a child, it's got me thinking that it would be really nice to have an heirloom collection to pass on to the next generation (I'm still a bit steamed that my grandmother threw my dad's 1950s baseball cards out). 3. For the investment appeal. Like many, I'm nervous about inflation. I haven't changed my Roth IRA investment strategy. I'm still trying to throw in at least 5k to 10k a year into those accounts and I'm invested in stuff for the long term (target retirement 2040 funds). But I like the idea of a little inflationary hedge as well, and that's also led me here. From what I've read so far, people seem to think that if you invest in precious metals, it makes some sense to take physical possession of the bullion (as opposed to a precious metals fund or security), so that's also got me thinking of coin collecting. I was wondering if investing in silver proof sets from the US mint (state quarters and the like) is a good way to start? Gold might be a little out of my budget...I am foreseeing earmarking about $30-$50 per month in to this hobby/investment. Is that a good tactic? Some other specific questions: 1) Can anyone recommend the best vendors to purchase from? Should I buy straight from the US Mint's site? I think right now the 2008 and 2009 silver proof quarter sets are going for $28. Is there another site I should visit? 2) On the US mint's website, it says that the coins are 90% silver. Does the fact that it is 90% precious metal qualify it as bullion, or does it need to be a pure 100%? 3) Am I pursuing a reasonable strategy, or can somebody else recommend a different approach to coin collecting/investing that will fit with my aims and the stated budget? Thanks to anyone with any insight, I know newbie questions like this are always kind of a drag, but I'd love some help.
You will most likely have smaller premiums buying silver rounds or bars. Dollar cost average. Gold commems also have smaller premiums as IMO. I have heard 10-20 % of your investments should be PM's, but IDK. This is just my opinion, please to not take it as financial advice.
If you're going to approach it as a hobby, fine, but numismatics is best not viewed as an investment. Regarding your specific questions: $30-$50 a month is fine. Depending on what you want to buy, you might find a little economy of scale if you make it $90-$150 every 3 months, or even $180-$300 every 6 months. 1) The best vendors from whom to purchase are those you trust. Spend time doing research to figure out what you want to buy. Do you just want .999 silver bars? If so, that's an investment, but it's not coin collecting. Perhaps you want 90% silver coins. That could be construed either way, but is really more of an investment. In this case, though, there is some numismatic value to the coins. In any case, figure out what you want to collect first. Then, ask more questions, do more research, and find reliable source(s). We can always help here. That being said, it's hard to send you somewhere if you don't know what you want to collect. If you're looking at a long term investment, the silver proof sets you mention from the mint are hit/miss. From an investment perspective, the premium on the silver is very high. From a collector's standpoint, you could get lucky and get in on a good year, or you could lose money almost immediately, depending on the mintage. Study! 2) "Bullion" is mostly reserved for .999 fine (or similar) pieces, but I've seen it used for 90% pieces. $1,000 face value bags of circulated 90% silver coins are often considered bullion investment, for instance. 3) Your strategy is fine. As mentioned in #1 above, you just need to decide whether you're more into investing, or more into the hobby, and based on that, pick either bullion or a given coin series to pursue.
Thanks for the feedback guys, it's very appreciated. I took the first dip and ordered a 2006 silver state quarters proof set off of e-bay, I think I got a decent deal after surveying all of the listings for that mint year. I think I'm going to purchase one set per month until I have all 10. I have a couple of sets of state quarters and one set of presidential dollars that I've been doing just from circulation stuff and have enjoyed that heretofore, so I think the silver proof sets will complement that. Now I'm off to dig up the only other coin in my fledgling "collection"...about 15 years ago somebody gave me a gift of a silver Alaskan coin...might not even be a coin because I'm not sure it has any stated value, might be more of a medallion. But maybe somebody on the site knows about it. Off to rummage around in the closets to see if I can find it and upload a photo later. Thanks again.
If your just getting interested in coins as either a hobby, investment, future item to pass on, I would suggest you first acquire a copy of the Red Book by Whitman Publishing. This would get you a lot of basic information about all types of coins. Then go to Google and type in coin shows and your state. You may find many or at least some coin shows in your area. I strongly advise going to coin shows prior to purchasing coins from anyone. If you do you may find that seeing coins up close and a large variety may be very interesting, educational and economical. If none, try coin stores. Go to some and just visit to get an idea of availability and prices. If you do go to a coin store, never purchase coins the first time unless you already know what your doing.
Welcome to the Forum! I agree with Carl about picking up some book and read all you can. There is a saying in coin collecting, " Buy the Book before the Coin" and that is the best advice any one can give you. As far as coins as an investment, you are going to need a large budget to deal with Brokers and Dealers to get a good return on your money in 31 years. If that is the way you are wanting to go then Heritage Auction is a good place for high end coins. Coin as a hobby would be the best way to go at first. Learn the in's and out's and who you can trust and who not to deal with. There are a lot of good place to buy coins from on the web, but just starting out I would look for coin shows and a good dealer that you can trust and deal with until you feel comfortable knowing what to look for in a coin. Again that take you back to the first statement "Buy the Book before the Coin". As far as buying coin on the internet you can try the U.S. Mint as you know, www.APMEX.com, eBay, www.coinworld.com, and www.smyrnacoin.com to name a few. You can also go to these sites to learn more about coin collecting: www.varietyvista.com, www.pcgs.com, www.numismaster.com, www.allexperts.com, www.lincolncentresource.com, and www.coppercoins.com. Good Luck and most of all have Fun!
If you want to start collecting, fine. Nothing wrong with proof sets, and so much the better if they are silver. BUT IMO buying US Mint products for investment purposes is not the way to go. Buy bullion items. Your premium payment will then be strictly the seller's mark-up for profit. US Mint products not only have the metal mark-up, but also all the additional manufacturing costs to make a "pretty" product.
As others have noted -- you have two quite distinct reasons for collecting. Your strategy, imho, is completely different if you are: (a) collecting as a hobby and want to leave some heirlooms to the next generation; and (b) collecting as an investment. A few random snippets of my own experience: a) I got started collecting as a kid, 42 years ago, when my dad and my mom both gave me their lincoln penny collections -- they had collected circulated lincolns by pocket change and keep them in whitman folders. They never visited a coin shop in their lives and never purchased a coin. It was a decidely part time kid-hobby to them. b) I currently collect: indian head cents, lincolns, jeff nickels, merc and roose dimes, wash quarters, and jfk halves -- but of all my coins, I feel most attached to those humble lincoln cents, that I still have, that my parents gave me. c) as far as investment goes -- if I had sold my cents 42 years ago, put the money in the bank to collect interest, it'd probably be worth more than those cents are now. Get my drift? I love them the most, but it's not worth a whole lot as an investment. That 1910 cent, next to impossible to find in change today, is still only worth less than 0.50 in the condition I have it in d) there is no substitute for good solid knowlege of the subject. Just go to eBay, where you can find really ignorant buyers buying things way too expensively . . . and where you can also find some relative steals: where the seller (and other bidders) don't realize the value of a coin. My point is not to endorse eBay, but to point out that if you don't know the subject well, you're going to make some mistakes. And if you purchase anything expensive, there will be some expensive mistakes. e) I've been told that "coins-as-an-investment" makes sense if you purchase coins in high grade condition. Obviously, you have to know even more than I described in (d) -- beacuse not only to you have to know all about the coin, but you have to know the market and trends, too. For this reason, I consider coins-as-an-investment to be above my pay grade (and too expensive for me anyway). f) one exception to (e) might be cheap silver coins -- *if* you think the price of silver is going to rise. Right now, the melt value of a silver (90%) dime/quarter/half is about 9.3 times face value. You can probably pick up coins in lots on eBay, from time to time, at 10 times face value (I saw a lot of 330 mercuries go for $321 the other night). Clearly, if you think silver is going up, this might be a good investment. But who knows? Two days ago melt value was 9.6 times face value. More historically speaking: from 2000 to the end of 2005, silver was less than $10/oz, sometimes under $5/oz. By Feb 2007 is was over $20/oz. In Nov 08 is was back under $10/oz. Today (at 10:30 am ET) it's just under $13/oz. Will it go down to the level it was for most of this decade (under $10?) Or will it go back up to the level of a few years ago? Or was the last couple of years just an aberration? Heck if I know!! (Price information on melt values at http://www.coinflation.com/, on historical silver values at http://www.kitcosilver.com/charts.html) Welcome . . . and good luck
I agree. My guess is that you'll make the same mistake that many people make when they begin. You'll spend a significant amount of money before you realize that you've changed your mind. Then you'll have to start another thread to ask about the best way to dispose of the coins you have so you can buy the coins you want. It's hard, but studying first and going slow is the correct course of action. Buy a Redbook and make sure you've seen the coins in person before you start buying them. You might find that silver proofs really aren't the heirloom investment you want them to be.
Thanks for all the advice everyone. I did go ahead and buy my first coins--a silver proof set of the 2006 state quarters. It wasn't a huge investment ($20), and I've been collecting regular circulated sets of the state quarters for the past year, so I'm fairly certain that my interest in that particular area won't wane. I do understand and appreciate the wisdom of not jumping in head first though without acquiring a lot of info. I am going to get a 2009 Red Book this evening from B&N for a little light weekend reading. Also, apparently the timing of this is good because there's a coin show coming up in my city (Sacramento) in two weeks, which should be a good learning opportunity. I may ration myself a small budget (20 or 30 bucks) to spend on something there, but I won't be making any significant purchases other than the silver proof sets for the foreseeable future...I plan on buying one of those per month over the next ten months. Though I may hold of on the 1999 set to see if the prices come down at all.
Wise decision old fellow. Set a budget limit and stick to it. Bring cash and leave the credit card at home so as not to be influenced by impulse buying.
Also keep in mind that even though you don't have any kids yet, you're going to need a set of sets per child. So if you are planning on having two kids, buy two of everything or you're going to have to go back and start all over again later. For reference, I think each set has about .9 ounces of silver.
1. Wouldn't suggest buying from the US mint, their markup is very high. 2. Wouldn't suggest silver proof sets as and investment. 3. Try APMEX for silver bullion. 4. Look into a precious metal backed IRA. In some cases you can take a portion of your existing IRA and convert it to a precious metals IRA. Just me but I wouldn't suggest more than 10-15% of your investments in bullion. Some people go 20% or more, risky in my opinion.
