Collection Strategies for Gold Coins

Well that brings me to another question... And I'm pretty sure this comes with knowledge of collecting and research: what year is best to get?

Let's use for example Quarter Eagle Indian (1908-1929), what year would be 'best' to buy to make the set more valuable?

By looking at prices I see that some are much more expensive to others, but does the saying 'If it costs more, it's better' apply here. I am the type of person that if I see something that I like, I try to get it if possible!!

I'm sorry if these questions sound like a complete newbie, but they are coming from one.

 

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Get a red book and read it.

I saw the 2008 version for $2.99 at Books a million last weekend. Read up on the types of coins in your type set. Tear out the pages of the coins you want to collect and toss the rest. Look at the mintages and how many quality coins are known to exist from the low mintage years. Most likely those are the keys.

Type all of the type info and mintage data into a spread sheet and plot your course. You can design your ultimate set and can keep a running total. Now that you have the ultimate type set defined...go shopping and see whats really out there to be had.

You will know more about the coins that you want than you do right now and you will be armed with a guide to direct you. Just don't pay to much attention to red book prices. They are in no way current but give you a ballpark to work with.

Red the book and then buy the coin not the slab. There is something to be said for eye appeal all MS64s are not created equal. Cherrypick the purdy ones.

I wonder how much a 34 coin type set in the best condition of the lowest mintages would be worth? $70-80,000? Do the math.

 

OK,

A type set it is then

As far as Quarter Eagle Indians go, it's the 1911-D that is far and away the valuable coin of the series. A typical grade 1911-D is probably worth, by itself, as much as every other date in the series combined. Rough mintage of a typical Indian Quarter Eagle was about 500,000 give or take, the 1911-D was about 50k pieces. That being said, it isn't a rare coin, Heritage alone has handled about 100 of them so far this year and they have 12 up for bid. It is, however, expensive. MS65s seem to bring $60,000+, it's been a while but the last MS66 brought close to $200k and even problem circulated ones are worth $3K+.

Meanwhile you can buy a gorgeous Mint State common date Indian Quarter Eagle for $1-2k. I'd think that $3,000 would buy you a VERY nice Certified Mint State 64 or so Indian Quarter Eagle, or an XF 1911-D.

So once again... buy a type coin (Common Date) in stellar condition, or buy a 1911-D. Ideally you would buy a 1911-D in a high grade, but how much are we planning on spending?

Either way you should be safe. It's the common date cheap coins for $200 that get swayed by the price of gold. If gold went to $200 an ounce an MS65 1911-D would not crash in value.

 

Oh,

And do me a favor, PLEASE... go out and buy some books. NOW. Go to coin shows, ask questions, look at coins, read as much as you can. Do this before you keep buying stuff, please? Pretty please with my ex-wife's lawyer's head on top?

Education is priceless, you want to familiarise yourself with what you are buying as much as humanly possible.

 

I would really be careful in buying coins, I don't want to dampen your enthusiasm but these are multi-thousand dollar coins and are not always that liquid.

If I was looking at the 1/4 eagle though and was going to buy one, I would probably get one of the proof as they have a total small mintage. I also think the Jackie Robinson gold uncirculated commemorative is a good buy too, you might want to take a look at that.

I would avoid the high mintage gold, you will probably be disappointed with the results, but like I said everyone has different ideas on this.

 

Appreciate all the replies and PM's. A lot of good insight here. I put the books you all suggested on order

We're talking about prices and high mintage, etc... what do you think of this coin here? The mintage for this coin was 2,812,750. Previous sales on ha.com were about 1-2k higher, and NGC price guide was about 2k higher also.

http://coins.ha.com/common/view_item.php?Sale_No=1118&Lot_No=2191

Thanks again for the all the info from everyone. Going to find a local dealer also

Greg

 

Step 1: STOP BUYING COINS!!! I cannot overstate this enough. You do not yet know what you are doing and you are almost certainly making mistakes that you will regret once you know more.

Step 2: Keep asking questions. This is how you can learn what you need to kow to avoid the numerous potential pitfalls that could cause you to make poor purchasing decisions.

Step 3: Once you have decided that you know what you would like to collect then look for books on the series that you are interested in collecting and read them.

Step 4: By this point you should have a very good idea of what you want to collect, so you can begin looking for coins to buy. Since you don't have any experience grading you need to stick to coins graded by NGC and PCGS. Then look for coins that aren't generic in nature. Generic coins change in value based upon which marketers are pushing what at any one time, which is something you want to avoid. Instead look for pieces that are better dates because those are more likely to be a better long term things to hold.

Step 5: Research prices by searching the prices realized at auction for recent coins similar to what you are interested in buying and be aware that if there are a bunch of prices in a fairly narrow grade range and then there are a couple of prices that fall outside that grade range, then that is almost assuredly due to a difference in quality for that piece in comparison to other more average for the grade pieces.

Step 6: Get a qualified additional opinion on the coin you are interested in buying to be certain that you are buying a coin that is average or better for the grade. Usually this opinion should come from a dealer familiar with the series you are buying. It may cost you a fee for this consult (especially if the coin is in an auction and the dealer will be your agent to purchase the coin for you) but it is definately money well spent. However if you call the auction house you can usually get someone there to do this for you for no fee.

Step 7: Actually buy the coin.

A couple of notes: this process should take at least 6-12 months to complete since you are completely new to the industry. Don't get frustrated with it though, it is time well invested. Most newbs who don't do this give away whatever future profits they may have made by purchasing mistakes that they later regret.

Also, this advice is wise for anyone who wants to try to "invest" in coins, which I don't recommend, but it is different than my advice for someone just having fun with a much smaller budget.

 

Greg, it sold for less than the recent price history would indicate that it should sell for which tells me 2 things; first and foremost it is almost certainly a below average coin for the grade. A coin that is probably an MS 64 coin that somehow snuck into a 65 holder. Additionally it tells me something I already know (as a numismatic professional), that MS 65 small gold is very soft at the moment because the telemarketers aren't pushing it right now.

These 2 factors make it look like this coin was a great deal, which is unlikely. Generally with coins searching for the absolue best price for a particular piece will only guarantee substandard quality in your collection.

This coin falls into the "common coin in an uncommon grade" category. As an investor it is the exact kind of coin you want to avoid. You want scarce to rare coins in the best grade available and also in your budget.

 

I think that coin is dead money except for the price of gold fluctuations, it is high mintage in a very long series of coins that not many can afford to purchase.

 

Thanks again everyone for all the input!! GDJMSP I will take Cave Troll's advice, since the dollar value of the coins I am looking at run into 5 digits.

Can't type a long message now, but I'll be back around on Monday, just wanted to say thanks!

Quick question though:

How often do coins like this come around with a mintage of roughly 1100? It seems like a lot of the $3's have very low mintage.

http://coins.ha.com/common/view_item.php?Inventory_No=196273015#photo

or something like this?

http://coins.ha.com/common/view_item.php?Sale_No=1118&Lot_No=1954#photo

Thanks!!

 

This is a good question. Availability and extant population is so much more important than original mintage.

As for the answer there have been 10 of the second coin offered at auction in mint state (all ms60-62) in the past 3 years. The first coin has appeared 12 times in auction in mint state (mostly ms62-ms65) in the past 3 years.

 

Greg,

I took a long look at this very coin at the Heritage Auction lot viewing this last weekend.

Cave_Troll is right on. This coin is overgraded. In fact, it's easy to see that even from the photo.

There is a lot of chatter on this coin, particularly the obverse. Here are some bad hits :

OBVERSE: Truncation of bust, in front of chin, between bust and star #1, in front of nose (on a line between nose and stars 3 / 4), between nose and star #4, above and to the right of the second "1", and a few lighter, minor scuffs behind the bust / hair.

REVERSE: In general, much better than the obverse. Look carefully and you'll spot some minor grazes, discolorations, and spots.

The coin is well struck and lustrous, though. I'll give it that.

My wife, an interested beginner, compared this to a 1901 MS64 (not looking at the grades) and preferred the 64. Smart choice; the 64 was a superior coin.

MS64s go for half the price of this coin.

So yes, at $3700 it's "priced right" for a 65, but it's not a 65. It's a double-priced 64 (or worse).

 

Jesh - there is a lot of good advice provided to you in this thread. Please especially follow the advice of reading more about what you want to purchase before spending your money. With your continued links to auctions, it appears you may not want to listen to that recommendation. Be careful!

 

Here's something super-cool I love to do :

Go to the big auctions before the live bidding. Sit down and look at the lots.

There are reasons why this is much more efficient than walking the floor :

• All the coins are in one place and organized.
• You know exactly "what is where" before you show up.
• There are thousands of terrific coins.
• Virtually all types of coins will be there. And several of each type (except the really tough types). Decide something you're interested in and really hit those.
• Since all coins of a type are grouped together, it's easy to compare. It's easy to learn which ones are high-end for the grade and which are low end. Guess which ones are more frequent ?

Get an auction catalog beforehand (or browse the website) and decide which ones are particularly interesting . Note those lot numbers, but look at many others as well. Might find some pleasant surprises !

None of this, of course, can replace talking to dealers and reading up. But I find it very helpful.

 

Or the curator at the Smithsonian !

Here's a great book : "Encyclopedia of US Gold Coins 1795 - 1933" by Garrett and Guth. Window shopping at home ! :thumb: :thumb:

 

There are some MS63s out there with terrific eye appeal. $900-ish.

Don't be impressed with gaudy numbers on the slab.

 

One thing about buying gold coins is this: If you buy a gold coin and get either bullion rate or below then you really cannot lose except when you buy a bullion coin at $1,000 and it does what it just did, but that's just the joy of collecting bullion. In the long run, you'll do fine. There's a lot of gold and silver out there. So don't think any time soon that your bullion buys will become rare collectors. But as you build your collection, you will find what you want to look at, what makes you feel like you have a valuable collection and you'll build from there.

 

Then they have not been up for auction very often, have they? (I'm being serious, that is not a lot, right?)

 

The reason I am linking coins to the auctions is so I can use real world examples to my questions With a budget of roughly $15,000/mo on coins, I am not going to spend it foolishly!!

Otherwise I wouldn't be asking questions