Is There Any Point In Investing In Numismatics...

At the current prices ($900 - $1,000) there may not be much point. When the market recovers (takes a moment to pray and sacrifice Peeps to the market gods) bullion will likely hedge down again somewhat. I typically buy in the $700 - $850 range for gold. It will come down again so buy low sell high when you can.

 

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Bullion has a daily price and is very liquid.
-Silver, Gold, Plat & Pall are all easy to convert to cash.
-Some bullion is reportable to IRS on liquidation.
-Bullion is considered suspect. It is an asset that has been confiscated in the past.
-Bullion comes in bars, coins and rounds.
-Bullion is not usually considered a collectable.
-Bullion currency coins are backed by the issuing nation and have a face value.
-Bullion bars are backed by the mint that issues them
Pamp – Credit Suiss – Englhard – Canadian - Austrian Mint are the top brands.
Marketing co’s often get their own stamp on bullion bars and rounds so you may see, Monex, AMPEX, Scotia Mocatta, Silver Towne, and others in circulation.
-Bullion may come in a sealed case stamped with an assay mark of authenticity or come with a certificate of authenticity.
-Some people like 90% Silver bags of old USA backed currency and other people only want new assayed bullion coins in sealed containers.
-Some people prefer .9999 fine gold (24k) because they may want it to be made into jewelry in the future.
-Many people like the copper/gold mix coins (Eagles, Krugerrands) in a 22 k purity because they like the durability of a gold alloy coin.
-Silver eagles and silver Euro Philharmonics are .999 pure but the Silver Canadian Maple is .9999 fine and may cost less than the eagle.
Gold and silver bullion is so easy to liquidate that it is the ideal barter tool.
To purchase bullion you may have to pay Bid/Ask spreads, Premiums, Markups, Commissions, Service fees, Postage fees and Insurance and Handling fees.


I like to trade common date Numismatic coins and will use them as an alternative to bullion. I hoard my rarities and only swap them for better grades.

Tax issues are different for these coins.

Numismatics can build great wealth. Good collectors make sets to auction off at a future date. Liquidity is not as great as common dates or bullion but returns can be amazing. Of course you need the right buyer and a good auction house.

Why are you considering the purchase of metal? Rarities have terrible commissions/spreads that can take years to overcome. Unless you know what you are doing, you can be throwing your money away….

 

Howdy,

I always liked collecting coins, because if push came to shove, they were worth money . . . 50 years later, I still like the thought.

I have both bullion and a collection. I see no reason why a person cant' do both. And I don't see how bringing the term investment into the equation has to make it an impossible task.

Coin collecting as a hobby - collect what you like for the beauty, history, and sheer enjoyment.

Coin collecting as an investment - serious homework is required as due dilligence as is the case with any investment. Generally, it's the high end PQ samples of key and semi-key coins. Even better is buying the Choice Collecting grade as defined by Bowers - the highest grade before a large gap up but again, making sure you get PQ coins with great eye appeal. And you simply MUST study.

Bullion hoarding as an investment - the pure play answer is to by plain vanillia bullion because it has the lowest premium over the spot price. Howver, by sticking with the plain vanilla bullion, you could potentially run into fungibility problems down the road when attempting to sell. Note that this would not be the case with gold and silver eagles. So I would summarize that you want to minimize your premiums while buying high enough quality to facilitate future sales.

Bullion hoarding as an investment AND and collection/hobby - SURE you can. Collect a modern or historical type set of gold bullion. Collect a modern type set of silver or really cool is to collect silver crowns and see how many countries you can gather.

just some thoughts,

peace,

rono

 

Coins sure did beat stocks over the last couple of years. Better date Barber coinage still seems good to me (but check that with some of the sharper knives in the drawer).

 

I'm pretty much fed up with talking investing. Everybody wants to claim they're right one way or the other. The thing is, after enough time passes, either side can claim they were right depending on the timing of the proclamation.

Many people will say coins are a terrible investment. But in what context? For what time frame? If you were investing in coins in the early 80s and not the markets, yeah, you probably lost. But I"d bet there's a lot of people who've been pouring money into retirement plans over the last 5-10 years that wish they would have purchased just about anything else now, including bullion or coins.

Look at the max projection of the DOW. Major spike after the depression, followed by roughly a 15 year plateau of almost no growth. Then 50 to 60, the market tripled. Some of the best years of America. Before the globilization movement. Major growth and an extremely prosperous period. Followed by 1960 to 80, of almost no growth. Another 20 year plateau.

Then from 82 to 2000, the age of spending, credit, and loans, which created an artificial, inflated economy, the market increased 10 fold in less than 20 years. During the 15-20 year plateaus, factor in inflation while you're waiting and you're losing money. Big time. Then factor in the capital gains taxes that come right off the top when you do finally, "win", if you want to call it that.

Are we on another plateau for another 20+ years? What does the future hold for this country and the markets?

Right or wrong, is there any logical reason we should expect the DOW to go up another 10 fold in less than a 20 year span? Even factoring in inflation? How about just doubling again in 20 years? Right now, that would get us back to where we were last year!!!! Minus inflation!

You want my honest opinion? I think the markets are like taking a gamble on a big ponzi scheme. There was a time when you could get in at ground level. After the massive increases, the people who got in early have won. Now it only gets harder and harder to pick a winner and then you need a lifetime to wait and then maybe have a chance of coming out ahead on a peak.
I believe it can only get so big and so sustainable. It's like musical chairs. Most people in the past have profited so they will tell you to invest in it and profit. Just hopefully when it's time for you to retire, you can get a chair.

For example, railroads aren't growing like they were. Walmart can only build so many stores in a given city. On top of that, major cornerstones of the market such as the big 3 automakers are just about at the end of the road. There can only be so much growth before markets finally level out. The last major growth we saw was as I stated, inflated, artificial growth based on credit. I don't believe the market is done adjusting yet from this.

Just don't forget about inflation and taxes when considering what the market can do for you.

On the other hand, you could invest all your money in coins. When I buy coins, I don't buy them expecting them to double or triple in my lifetime. It may actually be a losing investment if they can't keep up with inflation. But I would expect to at least get my money back out of them if I would decide to sell.
Which is better than just spending the cash on something else and losing it forever. Although, I suspect many of them will at least maintain with inflation.

So what's the better investment? Who knows? It's all a gamble. I don't think when there are multitudes of advertisements on tv and radio and a ton of focus on gold, that that is the time to buy. The time to buy was back at 300.00. I was too young to be able to do this. At 300.00-600 range, the risk was lower. Now the risk is much higher to fall back. 1k range will be risky until it hits 1500 to 2k+

If/when the markets show a strong upswing, people will get out of metals and you could see the price of gold come crashing down in a heartbeat. It may happen next year. Or it may take 10 years. This obviously hasn't happened yet. We're just waiting for it.

Like I say, when there's a ton of focus and advertisements everywhere to buy gold, that's probably not the time to buy. There's a lot of cheap stocks right now if you were a gambler. Although, I don't think the market's bottomed out yet. I think it will get a lot worse before it gets better.
Just my opinion based on the global economic climate, the future outlook, our policies, and the fact that the credit boom could be over for a long time. The banks may have gotten burned bad enough to where policies will change majorly. But, never underestimate the power of greed. They could start creating the next bubble within 5 years.

In the end, coins are more enjoyable to collect. You have them in your possession. You're not relying on some CEO or accountant to keep the books clean, there's no chance of scandal with a coin.

The ability to make lots of money normally comes with high risks (as stated above). Since coins have low to no risks, the majority of them will probably have low profit potential. Not all, but most, to the point you better know what you're doing if a large part of your portfolio is going to be coins and you plan to rely on selling them someday in the distant future.

 

That kind of ignores the current environment with the government and Fed spending a trillion dollars a week. I'm old enough to recall the 1970s when people thought $100 was unsustainably high, and people decided to wait until the price dropped, but it never did. I'm young enough to recall people here at CoinTalk selling gold at $400 and silver at $7 with the intent to buy it back when prices fell, but they never did. I think a lot of people about 10 years from now will kick themselves for not buying and holding gold under $1000 and silver under $20. The economy might move in cycles, but currency debasement is a long term one way street. Now, the "waiters" have one thing going for them. The IMF keeps hinting that they will sell their gold hoard, and that could drive gold down a couple of hundred dollars for several months. It's the last large marketable hoard of gold left in the world.

Time will tell.

 

You make good points there. We're definitely in uncharted territory. To try to derive something from the historical chart on gold is pretty much futile.

Gold was briefly over 500 and 600 in the late 70s early 80s before settling all the way back down to below 300 in 2000 and mostly staying under 300 through 2001. So after the last peak, it gradually dropped off and leveled out for decades.

We're obviously at or near the top of an all time high peak now with the markets in the tank. Maybe it will level off here for decades again? But to continue the climb it's been on, I believe is asking a lot. I need more time to pass to be convinced.

$300 gold sure seems like a safe level to buy at in 2000, 2001 in hindsight, for how long it had maintained there. I never had a chance to back then. Well, I shouldn't say that. It just wasn't on my mind and I was just starting a career at a very low salary. Although I was living at home so I should have bought a bunch. Blown opportunity.
But then, I'm sure it had been around that level for so long, people got comfortable and figured it would always be there at that price. Then when it raised to 450, people took their profit and ran.

One interesting note: In 2000, to buy one ounce of gold (even at my meager salary) would have been roughly 22% of my monthly take home. I've gotten 35% worth of raises since then but now to purchase the same ounce of gold in 2009 would cost me 46% of my monthly take home! I missed the boat. I don't like the direction this is going.

Yeah, the next 10 years will be interesting.

 

If you are looking at them for a investment you better know your coins or your investment may not be what you believe it is worth. I agree with SM.

 

I don't think there is anything "obvious" about it. Gold is about 10% higher than the price reached 29 years ago. Silver is about 70% below the all time high. These aren't "obvious" signs that prices are high. Everyone likes to point out that gold and silver performed poorly when measured against the highest peak prices achieved during the largest metals bubble in history that happened to be followed by a long period of disinflation and a strong dollar. That doesn't describe today, so expecting a similar price performance doesn't seem warranted to me. Remember, gold doesn't necessarily go up. The dollar goes down.

Time will tell.

 

Vess, Cloud, you two guys make a lot of sense to me....

 

Here's a neat website I found that will adjust past US $ into 2008 dollars using several different criteria:

http://www.measuringworth.com/uscompare/?redirurl=calculators/uscompare/

Using this calculator, the gold peak in the early 80's at about 600 was equivalent to approx. 1,400- 1,700+ in 2008 dollars. Which makes the case for higher gold now, along with the weakening dollar.

My problems are:

- It couldn't sustain at that point for very long
- I don't have adequate information to understand it's future potential.
- The downturn lasted for several decades.
- Many companies are anxiously selling at 1k+ an ounce. If they really believed it was heading for 2k in a year, why don't they just hold off?
- 2001 was relatively recent to be holding at a price of under 300.00. Now, in less than 8 years it hovers around 1k.

I don't understand how things could change that dramatically in such a short time period and then sustain at that point.

Don't get me wrong. I'm not saying I'm looking for 300 again. I just think 6-700 could be very possible again in the future, as a low point before the next up swing.

My final problem is, it's hard to tell what's real anymore. The country as a whole has been in and out of turbulent times since 2001. It's been one long downturn and record numbers of people have invested in gold. First it was terrorist attacks and a market crash. Now another market crash. We do know that demand is higher than it's ever been before. There's been an edginess almost like a state of panic ever since 2001. Which is when this whole thing started.

I'm not trying to proclaim which way things will go. I will just say that there is always the possibility that some day, eventually, things could go back to normal and calm down. IF that day comes and the demand lets up and people start selling again (for whatever reasons), I could see the price settling back down.

Or things could get worse and we end up with a global currency that devalues the dollar and everybody holding cash loses. I could see this happening just as easily.

As you say, only time will tell. I really don't know what to expect.

 

Vess...that is a very articulate, well thought out post. And I totally agree with you....I cannot tell you how many of my co-workers have lost a TON of money in the 401K's and will be looking at years to hope to time their retirements on a profit.....

Thanks for the great post...

 

diversified portfolio

Spread out your investments.
Real estate, stocks, bonds ( I like corporate, they are the first thing to be paid if a company crashes ) Gold, a little silver . I do not care for mutual funds as they create capital gains by the year. Stocks are a loan until you sell and pay capital gains. Re adjustments need to be looked at once a year for some , I look overal quarterly. I take a look each day now at commodity prices.
Getting caught in the trap of what is hot today is what gets you in trouble. Your allocation percentage is up to you and what you might need now,and a place to live and food.

 

You can pick up a 3/2 condo for $40K in an ok school district in the Phoenix area. That may be the place to park some $ (rental?). It is always smart to buy into a weak market and sell into a strong market. Therefore sell gold now and buy foreclosures and short sale houses.

 

I remember several years ago I had a client come into my stock brokerage office and ask my opinion on investing in 100 oz Silver bars.

I pointed to my $400 Door Stop....A beat up old silver bar I had paid $700 for, years earlier. She got the point.

Now that I think about it, Where is that old door stop?

Coinsternation

 

Coins are an investment in Life.

Should i resist the temptation to get involved in rare coins, at all, since i am mainly trying to protect my financial future against inflation or would some numismatic investment make sense also?

Coins are an investment in life, knowledge, education, history and happiness for me - I love it! If return on my money and protecting my financial future was my sole objective in life I would do the following depending on what age I was.
1. Work 2 or 3 jobs.
2. Save half of all the money I made at those three jobs.
3. Invest that money in a broad range of solid commodities such as gold and silver, land, food, oil, electricity (all the things people are going to need no matter what) and bonds. I would also have a safe at home where I put away cash money to the tune of $9999.99 a slug, many slugs!

But making and saving money were never my particular ambition - I just didn't care. Not saying that's right but that the truth. Heck anyone can become a millionaire if they only do half of what I said above and did it for 35 years - it's the simplest thing in the world, and no I did not say easy, I said simple. I was never willing to work that hard for much anything but pleasure and avoiding any consequences associated with it. Yes, it took me a long time to grow up and do not suggest my life to anyone - I don't think most would be as fortunate of plain old lucky as I was/am.

What I am saying though is this - if I collected coins for future profit I would be miserable - it's just not me. If you want something I have and need it more than me I'd just as soon give it to you as sell it. I do a lot of that each month giving kids at my coin show supplies, coins and help. I tend to live for each day as it comes or in other words, and this is one of my motto's - "how many people on board the Titanic skipped desert that night"?
That's how I try to live right or wrong and another one, "I'm the one that's got to die when it's time for me to die".

 

So, you're saying that a client wanted to buy silver in something like the $5-$7 range and you talked her out of it. But you bought silver for yourself at almost double those prices. And now that silver has finally returned to something approaching your original cost basis, you lost it. :hammer:

Is she still a client?

 

Like many said here...I have Bullion I buy only for investment...

I have coins I buy for the love of coins. Will they sell for more than I bought them for...without doubt many will...others certainly wont because I collect everything under the sun from the most common to rare. Even the most common coins can be very attractive to me and some rare coins are butt ugly.

I do not expect to make a profit on coins...I collect them for my own reasons and that is simply a love for the art of the coin.

Even some bullion coins I have I would now have a hard time parting with...thus if I buy bullion I must buy one for my collection and the rest for investment... They are coins after all

 

Amen.............Lincoln Pennies are reasonably hot right now. BU singles and wheat rolls are very strong. As a consistant buyer of these two items, dealers were approaching me at the recent Charlotte, NC show to see if I could fill their want lists. That's a switch ((*_*)) A lot of hype around "OBW" rolls or Original Bank Wrapped. Be careful here.....many are selling way over dealer grey sheet and you may not recoup your investment.

 

Best Low-End Bullion Investment?

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