Question: Are we in a bull or Bear market? And if so, are we at the tail end or beginning of that market? Thanks in advance.
If we knew that, everyone would be rich, but we aren't unfortunately. When people's got the money to spend, the market will go in a frenzy period. But when things go bad, prices will go screamingly low. Some coin markets are fairing at modest prices but on other hand, some markets that weren't appericated in the past go at insane prices these few years.
I'm Quoting David Hall on PCGS' web site here... The rare coin market moves in cycles. Bull markets usually last 4 to 6 years and Bear markets usually last 2 to 3 years. He then goes on to say... The coin market started picking up in the last few months of 2001. Coins were very hot throughout 2002 and even hotter in 2003. We are definitely in another Bull market. How long it will last and how far it will go will be determined by many factors, but one could make the argument that a combination of factors that were evident in the past four Bull markets are now all evident in this new Bull market. The next few years should be very exciting for all coin market participants. That's why I ask this question: does anyone think we are in the tail end. If that is the case maybe I'll hold off on any large key date purchases just yet... maybe concentrate on common dates... have fun with that, then when the Bear comes along, start the large KEY DATE purchases. Ant thoughts?
What would you expect a guy who sells coins for a living to say ? I disagree with parts of his statement. The coin market began to pick up in '99, by 2000 it was rolling along pretty strong, by '01 it was off to the races. So I guess it depends on where you want to start counting. I will agree that bull markets typically last about 5 yrs. But bear markets tend to last a good bit longer, usually about 8 to 10 years. The last bull market we had ended in '89. I will also agree with those who say that the past isn't necessarily an indicator of the future. But quite often it is - markets tend to run in cycles. There's just no getting around that. So what will happen in the future is anybody's guess. But we do know what has already happened. Modern coins reached their peak about 2 - 2 1/2 years ago. Since then values for the majority have been dropping. Today, prices are 50% or less for many of them from what they were. And realize I am speaking in generalities here. You can always find a specific to counter a generality, but specifics don't set the trend - generalities do. For the rest of the market, regardless of what the numismatic press keeps writing about, the market as a whole has slowed down a good bit. Some prices have dropped and a few have increased. But it has been nowhere near the increases seen in '03 & '04. All the record prices we keep hearing about have been for rarities, be they condition rarities or number known rarities. Common dates have increased very little if any. And much of the increases we have seen have been due to the rise in the price of precious metals. So to answer the question, yes, technically we are still in a bull market. But I believe we are at the end of it.
I think you need to invert the question to get to the right answer. We are in a long term bear market for the dollar. This was very apparent for several years ending around the beginning of 2005 when the dollar stablized. Some observers believe this was due to the tax break on repatriating dollars that expires this coming week, and they believe the dollar will resume its drop in 2006. How does this relate to coins? The underlying economic conditions favor investments in commodities and other things. Coins represent one of those "things" along with real estate, oil, metals, art and other tangible items that are viewed as ways to preserve purchasing power when the dollar falls. Nothing about this guarantees that coins will continue to rise because numismatics enjoys its own cycles separate and apart from the rest of the world. But it raises the probability that coins will continue to rise in value -- for now.
