Any Recommendations or Advice?

I'm relatively new to coin collecting and bullion (2+ years). I know they are 2 completely different things. I actually got into coin collecting after getting into bullion investing and by doing lots and lots of reading on this board (as a novice, I've done more lurking than commenting). The bullion interest brought out the natural collector in me and I'm enjoying my coin collecting a lot. (And as an added bonus it's an outlet for some OCD tendencies .)

Now I am considering investing in graded numismatic coins. (I already put as much as I'm comfortable with into PM bullion.)

I have about $10k give or take for this investment, which for me is a serious amount of money that I cannot afford to lose. Yes, I know they say not to invest money you can't afford to lose, but that's for the stock market. Does the same caution exist when talking about investing in graded numismatics?

I would imagine there are "safe" numismatic investments and "volatile" ones such as trends. In terms of length of holding time I am looking at about 10-20 years with 25-30 years tops. And I'm not necessarily looking for appreciation. I just want something that would keep up with inflation because cash loses value at today's interest rates.

The problem is, I know VERY little about numismatics as I'm a novice collector. Also, the little I have learned is only about small time numismatic items that interest me (mostly about $40 - $140 per coin with up to $200 max for something extra special).

So, I don't know where to start and would really appreciate your recommendations and advice.

 

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P.S. Am not sure how much this matters, but I would be keeping the coin(s) in a safe deposit box at the bank. I have put lots of large indicating silica gel packs in there which turn green (from orange) all year long (more so in the summer). The location is the Northeast a few miles from the coast. I would therefore need coin(s) that won't require a zero humidity environment to retain their value.

 

with @-jeffB.

Unless you're a professional numismatist or dealer, forget about the investment or inflation thing. I'm just a hobbyist. If I had to make a career/living out of coins, I would have starved years ago.

If you want to end up with a small fortune, you better start with a large fortune!

 

As a long time collector of Silver bullion and collectible coins, both raw and slabbed, I can assure you that if you look only to realize a profit, you will be disappointed. I own several coins that are "worth" much more than I paid. Selling them is a different subject. What a coin is worth to me can be a lot different than what it is worth to someone else. Don't get me wrong, I have bought and sold many coins at significant profit, but most I am happy to realize anywhere from breakeven to maybe 20%. Several I have sold at a loss just to turnover the surplus.

Buy what makes you happy!

 

Collect coins for fun not investment. When you go to resell you will be disappointed. You might break even. Coin collecting is for learning about history, the asthetic artistic part, grades, and rarity. Talking about coins with other coin collectors. Buy coins that you like and not what someone else tells you to buy. After collecting coins for 20 years I learned that coins are not a good investment if that's all you are collecting for. If you are into coins for the fun and sharing what you learned about coins with others then it is a very worth while hobby. "I can loose myself in coins". Meaning I get way more out of collecting coins than just the value of coins itself.

 

Collectible coins are marginally safer to invest in than a horse race because you have the intrinsic value. I sometimes get a coin report that lists the coins that have gone up and down, and I can see no trend. PM me and I'll forward the next one I get.

 

Here are my 2 most expensive coins I own. Will I ever sell them ? No!!! I enjoy them to much...

Belgium






and

German States/Baden



The first coin is a grade rarity. The second coin is all about the griffins and mintage. There have been coins that literally took my breath away. This is also a big part of coin collecting. The enjoyment of the coins itself.

 

Want to know the secret to making a small fortune investing in coins?

Start with a large fortune.

 

Thank You All Very Much! Your replies have all been extremely informative and helpful!

As I said in my OP, I'm enjoying Coin Collecting as a Hobby very much, even while I haven't spent all that much money on it (relatively). I especially love the history of it - holding in my hands old coins from the mid 19th century is amazing!

I've also put money into Bullion strictly as an investment in PM. I haven't bought any PM in proof, graded or otherwise collectible conditions and bought as close to spot value as I could find.

(I don't really see Silver as the sort of PM to invest in as a PM investment, both because it has acted so wildly in terms of the rises and falls over the past 20 years and because I'd have to buy too much of it for a significant investment.)

I realize that my PM investments were up for volatility which is why, as I wrote above, I only bought as much as I am comfortable with risking.

But I thought that a high value Numismatic coin or two could retain its value over the years. I've got the Index Funds as well as the IRA in Stocks, Bonds, Mutual Funds, etc.

I was looking for something that I could hold in my hands which is not bullion, cash, a diamond or something else that needs an appraisal before buying it (like artwork). I thought a coin or two would be good, but apparently, that is not the case.

JeffB - Thank you for explaining in so much detail how I would lose just by the dealers fees.

 

Cant go wrong with a coin with a Cat on it!

 

@Good Cents. There are very nice rare coins you could buy, but you would have to wait 10-20+ years to see the values go higher and you would need a buyer. It is a big risk. Buy coins you really like and do not worry about the value of it so much unless you spend a crazy amount on 1 coin.

 

Thank you.

As I said, I'm enjoying the hobby very much and have been buying the coins that I loved without thinking about the long term values, but rather simply because I liked them. And the range that I spend has been between $40-200 per coin because I do not have limited funds for a hobby.

I thought there could be a way to put some funds I have stashed in the bank earning pittance, into an investment in something I've grown to enjoy so much.

 

I suppose I thought that there might be a few tried and true coins with certain grades which have proven to hold their value over time and that is what I was looking for.

As I said above, I don't want to put more than I already have invested into an Index Fund. And I don't mind "only" keeping pace with inflation. In my mind it is better than keeping the money under the mattress (as that certainly doesn't keep pace with inflation).

And yes, I suppose I was hoping to buy the coins from another collector to avoid the dealer fees, and then sell them at a coin show or privately to a collector in 10-20 years down the road, again, to avoid fees.

I thought there would have been a few coins in certain grades that do hold their value and that is what I was looking for.

And as a novice, I was hoping you experts would know what those coins were and could advise me.

 

Selling coins at a coin show is a bad idea because dealers take 20-40% off your asking price to resale coins. Been there done that. Are you talking about U.S. coins or world coins ?

 

I don’t know that I have ever seen a thread with so many informed and perfectly targeted replies. There is little I could add so I’ll just offer a personal perspective.

In the 1990’s I had some good fortune and earned a small windfall. I loved coins and was a poor man. I never owned gold before and purchased a small stack of St Gaudens double eagles just knowing I was “investing wisely”. Now 25 years later, I got lucky simply because the spot gold charts rose. But, what I didn’t account for is the entire face of collecting has changed radically. While the spot value rose, the numismatic interests have tanked. Point being had the spot charts not risen, my “investment” would have been a terrible one. That was the last time I looked at coins as an investment vehicle.

We have no way to know what the next wave will be in this hobby. I couldn’t have dreamed that the error side of collecting would be so popular.... Enjoy your coins as a hobby.

 

I've done as well as anyone has "investing" in coins and I wouldn't do it again had I known then what I know now. I expected to be able to able to take profits 30 or 40 years ago when I was still young enough to enjoy it and "reinvest" it.

Collectibles are never predictable and even if you're right the market can make you wrong. You not only have to be a contrarian just like in real investment but you need to be in sync with the specific things everyone else isn't doing. In the bag and roll craze you needed to be buying varieties and Gems, for instance.

Who knows what people aren't paying attention to right now but even if you do know (I've got some ideas) it might not pay off for another century or you could still miss the boat because of the way the demand unfolds or the specific coins that come into high demand.

There's a very strong tendency for ONLY rare coins to do very well and an equally strong tendency for "investors" to set aside ONLY common coins.

 

Many of us do both and started in one or the other and gravitated towards the other.

WARNING: SPECULATIVE ACTIVITY AHEAD !!

To the 'Nth degree !!!

Stocks go up over time, especially as the time frame increases. Compounding works to your benefit.

These variables do NOT come into play with coins, bullion OR numismatics.

Caveat Emptor !!

If those are your time frames, I think it's POSSIBLE that some coins would be LIKELY to appreciate -- but I'm not as confident as an investment in a 10-year Treasury bond or even AT&T or Proctor & Gamble stock.

I think you need to do ALOT MORE RESEARCH here before you "risk" your $10K.

But if you need a place to start....I would say that common and semi-common Saint-Gaudens gold coins have both bullion and numismatic value and are among the LEAST RISKY things out there if you do your research and buy smart (or at least don't buy super-dumb). Maybe Morgan Silver Dollars, too (but the premium to bullion is much higher).

The one area that does seem to be moving up is foreign or world coins, but that's not my area of expertise though we are talking about it in the PCGS 3000 index area and other threads.

 

The more underlying PM as a % of the total coins value, the less numismatic risk you have and the more PM risk you have. And for some, the PM risk is more easily tracked (you can see silver or gold prices daily).

Again, I think if you want to play it safe the area to look at might be low-60's grade Saint-Gaudens gold coins. I myself like the MS65 grade, but you'll pay less if you go 62 or 63.