coin investment choices?

Howdy all,

I'll be retiring next year and have collected for 50+. Lately, I've come to the conclusion that my overall wealth needs greater diversity. Old Baron Rothschild said to have 1/3 in securities, 1/3 in land and 1/3 in rare art.

Knowing nothing about rare are and something about coins, I've decided that upon retirement, to take the tax bite with some deferred money and buy some investment grade coins.

I'm considering those that I'm familiar with from collecting like Indian Heads, Buffalos, series keys, and some Carson City stuff. I may be buying for investment, but I might as well buy what I like. ;-)

I'm leaning towards certified MS stuff and picking up the keys IHC 1877, 1909S, LHC 1909S, 1909SVDB, 1914D, nickels 13SII, 26S, 37D 3leg; dimes, 16d, 21 and 21D, CC - morgans, and type.

I torn between going for fewer but in MS65 or taking the Bowers approach and buying the MS state under the big step. By this I mean that there are some coins that you can buy an MS64 for X, but an MS65 is 4X. There is also his feeling as to why pay more for an MS65 R when you can get an MS65 RB for quite a bit cheaper.

I particularly will avoid modern high grade stuff. feh.

thoughts,

rono

 

Log in or Sign up to hide this ad.

It's just my opinion, but I think you are about to make a big mistake. The "bid/ask spread" in rare coins is too large for them to be an investment. When you go to resell them, you'll probably take a surprisingly large hit to the value you thought you had unless you unload them one at a time on Ebay, or something like that. I think you would do better to buy gold and silver bullion coins close to the spot price and be satisfied with a return similar to the underlying metal. But I do agree that four MS65 coins are probably better than one MS66. Quantity has a quality all of its own.

But you've collected longer than I have and probably know more than I do about coins, so maybe my advice is out of place.

 

Cloud:
You have some good advice.
Rono:
And I agree with your thoughts.
However, please consult your tax adviser first.
As an accountant, I would shudder to recommend what you are going to do. (But, then, I am a coward.)
Yes, I (personally) think that coins are a good investment, and outperform the stock market over long periods of time.
However (here it comes) we are in the fourth year of the current bull market. What goes up may (and often does) go down.
I definitely think that your direction: "I'm leaning towards certified MS stuff and picking up the keys IHC 1877, 1909S, LHC 1909S, 1909SVDB, 1914D, nickels 13SII, 26S, 37D 3leg; dimes, 16d, 21 and 21D, CC - morgans, and type." is the way to go.
Key dates better grades, and certified.
Stay aways from those silly 'condition census' modern coins, that is where the big fall (read: crash) in prices will occur.
The biggest thing is to go for the l-o-n-g term.
By that I mean three years or longer. If you are playing for the short term, use bank cd's instead.
Good luck, and let us know what you purchase.

 

Unless you are a very weathy man, to invest in rare coins at this stage in life should be for entertainment purposes only. You will most likely break even in your lifetime. The time to invest in rare coins is as you work towards retirement and have time to appreciate. Buy rare coins because you have disposable income and want to enjoy them. If you are looking for a managable return, it's not where the market is. I would suggest getting some professional investment advise before you sink anything more than play money into rare coins.

 

small bio techs and ms 70 modern commems (joking).

 

I'm not sure about short term investing in coins, as it seems might be the case if you are currently retiring. But, as for long term, I don't see how you can go wrong with coins. take for instance the 1909svdb Lincoln cent and the 1916d merc dime...both have more than doubled in value in less than two years time. No stock in the history of the stock market has fared as well in such a short span.

If you buy wisely, you will never realise less than your initial investment in coins. Stay clear of moderns, as bullion values are too unstable to guarantee anything in return. Buy certified and do your homework. It's a win-win situation. You'll have fun and you'll be making a valuable investment.
Best.
Guy~

 

I really didn't know it was possible for someone to be that wrong.

They may be a very small percentage of the securities universe, but there are in fact many stocks that did better than double in value in less than two years.

Example: Google, Inc. (GOOG) closed at $195.23 per share on Feb. 15, 2005. Exactly two years later, it closed at $481.50, an increase of nearly 2-1/2 times (247%).​

(It closed at $530.26 today).

 

Howdy cloudsweeper,

Just because I've collected for a long time doesn't mean that I know much.

I do know the bid/ask spread seems to revolve around 20% and that's a significant hurdle to overcome.

I said 'investing', but I'm still talking about the longer term and probably just willing them to the boy.

Indeed, I'm talking more about wealth diversification into something I know that if done right should hold its value and possibly even work countercyclical with the stock/bond and real estate markets.

thanks, however, for your response,

rono

 

Howdy treasure hunt,

As an accountant you can appreciate that this is more of a wealth diversification ploy than any sort of short term investment. I'm looking longer term and probably just die and leave it to my son and grandkids.

However, it looks like we agree on what to focus on.

thanks,

rono

 

Hi Andrew,

Not super wealthy, but wifey and I are in good shape. It's just that we've got way too much of our wealth tied up in securities and I don't choose to be a landlord and coins is something I enjoy. My regular collection has appreciated considerably over the years and this was sort of putting whipped cream and a cherry on top and then leaving it to my son and grandkids to fool with.

So I'm more concerned with a STORE of wealth in lieu of securities and real estate and am wondering how the folks around here would go about that strategy.

Lastly, I'm not talking about wasting the pension or entire 401 here, but probably taking about 10% of my overall retirement and none of wifey's (I am not suicidal).

anyway, thanks,

rono

 

Thanks, coleguy,

Yeah, I'm not in a rush and am doing my homework - you folks are part of it.

I'm thinking more longer term store of wealth than trying to make a quick buck. Hell, I can play the market and make quick money. I'm looking to diversify OUT of the market as I'm too topheavy in that arena.

And I'll probably buy and die and let the heirs worry about them anyway.

As for bullion, that's a whole different animal that I'm playing as part of the stock market, as it were. As for moderns, I still don't get it.

thanks,

rono

 

Rono:
It does seem that you have spent a lot of time thinking about this.
(Especially considering the comment about your wife's funds-- smart man!)
Just be careful, and try to buy as close to bid as possible.
If anyone tries to sell over ask, run, don't walk. Unless it is a REALLY choice piece.
Yes, I have paid over ask, but for choice pieces.
Currently I have on hold a Barber Half, a 1913 D mintage of 534,000.
I think that it is a real sleeper-- and priced at a common date.
It is a PCGS AU-55, and I am ready & willing to pay over ask, especially since it is the first one that I have seen in years.
Also, I paid over ask for an XF-40+ 1914 Barber half, and a 1914 half in MS-63, just try to find another!
In fact, I paid nearly trends at the time and would have paid over trends, for either of them.
Those are truly scarce coins.
Good luck.

 

Howdy hontonai,

Ah, a stock market person. You're correct of course. Hell, I've got stocks I own that have doubled and tripled in a couple of years. Boeing and Yamana Gold and Consumers Energy for examples. That's my main issue.

My overall wealth is too concentrated in securities and I'm looking to diversify OUT of them into something else. House is paid off, both have defined benefit pensions with benefits. But I also have a 457, 401 and an IRA and taxable account. We're both covered but way too heavy into securities.

So, I figure to diversify with a small portion of my deferred monies into coins. I've already got a decent collection but could sweeten it considerably. And in all honesty, we're probably only talking about $50-75K max. that I'd be spending.

But as for the stock market, I've been doing very well for quite a while and now am looking for a place to stash some of my gains.

thanks,

rono

 

Hi Frank,

Yeah, that's why I'm starting to do serious research now. The specific coins I would like and the condition I can and choose to afford and that look to be the best value.

And that's why I would stay with what I know best - cents, nickels, dimes, carson city, and avoid like the plague the other stuff. Hell, I wont' invest in something I'm not familiar with in stocks - why on earth would I start with coins.

I also plan to stick with PCGS and the best dealers. Basically, take my existing collections and finish the series' with high grade certs that I can leave to the boy and grandkids.

It's more a store of wealth than a short term type of investment.

You can own a selection of very risky investment vehicles, but if the selection is well diversified, your overall risk drops significantly.

thanks again for the response,

rono

 

A darn good question and I think it should be long term.

I'll soon be 45 and buy coins that I like but that I also think will appreciate nicely over the next 20 years or so. I'm heavily into type so I guess I take an even greater risk but most of what I've bought in the past 10 years has done pretty well and I still have them.

I would go with slabs all thw way no matter what people may think. I would also sell them slowly as needed not try and make a huge profit all at once. There are so many ways to see what a particular coin is doing at any time that it can help you decide what to sell and when.

As for the coins you mentioned investing in I like your choices - I don't think the keys and semi-keys will take a plunge as much of the "high grade" modern stuff will.

I look for "sleepers" as well in any condition that fits my budget. Used to snatch up 27-S Standing Liberty quarters in G-VG for $6 and look at them now. NOT huge money but a nice margin.

Just a few potentials I might add to your list.
1912-S Liberty Nickel (mintage 238,000)
1885 Liberty Nickel (the key and always going up)
1914-S Barber Quarter (4th lowage mintage but WAY behind the top three in value)
1913, 14 and 15 Barber Halves.

Good luck in what you decide!

 

That makes sense. I'm investing in $20 Liberty double eagles and Saints. The goal is a date set of Type I (pre and Civil War issues), Type II and a Type III set from the San Francisco Mint in MS62 grade or better. This is followed by a date set of Saints in MS62 or better grade. A collection that I hope to complete in my lifetime and a legacy collection for the next generation.

That's my strategy. Old cents, and 3 legged buffalos are cool but once bitten by the gold bug, there is little that you can do to fight it.

 

"Just a few potentials I might add to your list.
1912-S Liberty Nickel (mintage 238,000)
1885 Liberty Nickel (the key and always going up)
1914-S Barber Quarter (4th lowage mintage but WAY behind the top three in value)
1913, 14 and 15 Barber Halves."

Clembo:
Have you been reading my coin list? I have been buying all of these dates.
You forgot the 1886 V-nickel, the 1913 P Quarter (way undervalued) the 1896 S quarter-- still too cheap and I haven't found one (a nice one) in a year.
Also, the 1909 S and 1914D Lincolns, and the 1908 S Indian.
Thre are others, but I'll tell you after a accumulate a bunch more of them.

P.S. I have always liked the 1927 S quarter, glad to see that someone agrees with me.

 

Ya know what set I thought it would be fun to put together. Proof Liberty head nickels. Small mintages and reasonable prices, go pr63 (all cert Pcgs or NGC) on a set like that and be as picky as possible on quality (NO spots).

or how about a short set of matte proof Lincolns (RB), being VERY picky on quality and being patient.

 

You may also want to do some research into going about how you pass your collection on to kids or grandkids, or whoever. There is a point where the receiving party may have to pay taxes on the value of the collection versus an inheritance tax based on face value. You can get around this by leaving them the collection as a gift before you pass away. Nobody wants to leave a gift that has to be sold to pay for itself.
Guy~

 

I was ROFL when I saw this Frank.

I still have about 25 27-S mainly in G-VG but a few fine and a borderline VF.
Made sure to get my run of Barber halves from 13-15 and have dupes of the 13 and 15.
As for 14-S quarters I have a dozen now the best being a VF+ and totally original.
Add three 12-S Liberty nickels from AG-F

No 1885 or 86 Liberties - been pursuing tougher 20 cent and three cent nickels. As for one of my latest purchases it was a 14-D Lincoln (and I don't really like them). Couldn't pass up an ANACS F15 for $225 though.

Pretty sure I have a decent 1913 quarter and might I add the 15-S. Tough to locate as well as the 1909-O.

Warms my heart to know that other people are looking at those "sleepers".