Money burning a hole in my pocket

I was wondering that too.

 

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The 1909 S VDB is down, in price, from previous years.

So, go for it

 

My thoughts, separate investing from collecting. Collect coins because you enjoy it, invest because there is a return. When you try to combine them, specifically in the bullion/numismatic area, you often are just rationalizing your decision. @rickmp gave you the best advice.

I personally collect because that's how I want to spend my spending money. If I wake up in 20 years and all my coins are worthless, a real possibility with ancients and MOUs, then so be it, no skin off my back.

If the money I have needs to go into my retirement account as an investment, I am looking for the best possible investment, coins do not enter into that calculation. I know myself too well, and understand how easy it would be to justify 'investing' too much money into coins. With that said, I do have a small portion of my assets in precious medals, but again it's a investment asset. I buy the lowest spread that gives me the medal I want, I don't care how it looks, if it's scratched/toned/ugly/whatever, I don't play with it or take it out to look at. It's not a collection, it's there purely to serve my wealth creation/preservation purposes.

So yeah, my thoughts are separate your investments from your collection. If you need the money to go into an investment, put it there. If it's spending money, then spend it on coins, and consider it spent in the same way that you spend money on restaurant/baseball game/movie...

 

Are you speaking strictly as an investment?

 

If so, then reference this:

http://money.cnn.com/data/markets/dow/

 

And YTD a $1,250 investment in the DJIA would have become...1,367.50 minus fees.

 

Not true. Are you calculating in dividends? Most people forget dividend proceeds when talking about stock market returns, and only comment on change in stock prices. I have many stocks giving me about 5% annual returns, as well as capital appreciation.

Like others have said, investments are investments, hobbies are hobbies. You should never confuse the two. If you tell me you have $100,000 of equities and want to diversify 5% of your money into PM, then fine, I have no issue. However, never believe your coins are a prudent contra asset for your investment portfolio. If they turn out to be fine, but if you start believing your hobby is really an investment, you are a prime fish for a dealer to get you to vastly overpay for your hobby.

 

Do they? In 1963 unc SVDB was $280. Just allowing for inflation today it would have to be $1,382. NGC price guide shows an MS 62 shows auction results between $1082 (this year) and $1351 (last year) So no appreciation just almost keeping up with inflation. I used the MS-62 figure because you can't really compare grades from before and after the slab era began. Different standards.

Going strictly post slabbing, a MS 65 was $800 in 1986 and $2350 today. Inflation would require it to be about $2000. So it has appreciated a little in 31 years. A growth rate about 1% better than inflation. Gold ended the year in 1986 @ 396.13 After 31 years it is also about 1% better than inflation.

Of course with any investment, timing is everything Get in and out at the right time you make out big, pick the wrong time and you can lose big.

 

You are asking coin collectors whether you should buy a rare coin or a lump of gold. Surely that is a rhetorical question!

 

Compare your same results with an investment in an S&P index fund of the same timeframe. Since 1986 it is up over a factor of ten in that timeframe, not counting dividends. So only from capital appreciation the $8000 in 1986 would not be over $8,000, and most likely over $12,000 if the dividends were reinvested.

This is not even accounting for another huge factor. When people talk about prices in coins, they are talking about net retail price. Problem is, coins have a relatively very high transfer cost, i.e. they cost money to buy and sell them. Want to achieve "retail" price for the sVDB? You most likely will have to pay 20% commissions. So instead of $2350 today, you only receive $1880. This high buy/sell spread is another huge reason why collectible coins are not a preferred investment vehicle.

 

Though I agree with those that say "buy what brings you the most satisfaction," I'll give some of my thoughts and preferences on the choice. Yes, the 1909VDB has a track record and has remained a sought after collectible for decades now. None of that, of course, guarantees that it will remain so. It all depends on collector demand, which could really tank at any time. Such a coin will probably never be valueless, but if times get rough (and many argue that they probably will, but nobody knows the future), people will probably stop paying premium prices for collectibles. Also, the 1909VDB has a value scope of coin collectors or maybe even collectors of "rare things." Though I don't have any real data on this, gold likely has a wider value scope, meaning a larger amount of people would likely buy a chunk of gold from you than the 1909VDB. Gold is an established market investment commodity and collector coins are sort-of an investment but mostly collectibles. Given the preferences stated so far, remember that you asked a group of coin collectors to choose a chunk of gold over what this community sees as a rare and desired thing. It would be interesting to ask the same question to a different group. As for me, I would take the gold over the cent.

 

Let's get realistic!!

The current intrinsic value of that cent is virtually nothing.

The "fantasy" CDN Blue Sheet states that buyers are acquiring a PCGS MS64 1910-D $20 Double Eagle that has a lower mintage than the 1909SVDB, having an intrinsic Gold value of ~$1210, for $1240.

Discussing "real value" of assets (e.g. derivatives, stocks, etc.) for which I believe, generally you can no longer even receive a paper "certificate" could also become a fantasy.

Don't use logic in your discussions of value, as I believe the subject of "value/investment" is quite subjective.

Individuals who inquire from internet entities how to "invest", may rue their acceptance of same advice. "Invest" in whatever "moves" YOU.

JMHO

 

Have we all or most of us always preached that coins should a fun collectible and not be considered an investment? I would very happy if I purchased that VDBS at $280.00 and was able to sell it today at $1,000.00. Back in the day, I purchased two copies of the Incredible Hulk #181 at a 15 cent cover price. Today that collectible, in it's current condition is worth $1,5000.00. Not bad I'd say. But I bought them as a collectible, not an investment. Some of the above is like comparing apples to pumpkins. If one is able to sit on a VDBS for 30 years or so at todays price, I'm pretty sure they would end up being happy with it later. What has not been mentioned yet is the fact that many of these are re-entering the market place after being held for many years by us old timers that are divesting for our retirement. This will, and has in the past, changed the prices of many key coins. It's all cyclical.

 

Except the SVDB isn't rare, it's just expensive and in-demand. 484000 were made and about 50000 survive. I own a CWT with 5-10 known examples that is worth about $60 simply because not that many people want it, even though it is undoubtedly rare. British Maundy Money is available for very cheap if you know where to look, even though only a few thousand sets were made for most years.

To the OP, I would say to get whatever satisfies you the most for your money. How badly do you want to complete your set of small cents? How badly do you want to venture into a different area of collecting? How badly do you want to own a double eagle? Try to make your money buy happiness, if you know what I'm saying.

 

Tex, I have to tell you, that's the only hole in my Lincoln cent collection, too. Now there's a coincidence.

 

Not a penny collector, Just bought my first St. Gaudens Double Eagle MS64 yesterday and next is the Liberty Head Double Eagle. Just got to have them for my collection!! Go for the gold.
Political discussion not allowed on site, read the rules. Thanks

 

How much do you like your Lincoln Cent Collection? If I had been working on a project like that and I had the funds to finally complete it I would go for it. I'll be in the similar situation where I will be coughing up $1,200-$1,300 for a 1972 Type 2 Ike in MS65. Go for the coin you've wanted for a long time.

 

Correction on that comic...$1,500.00. sheesh, I could have retired.

 

Just FYI, I went with the gold for something new to watch. I appreciated everybody's input. I was really wondering on what to do, but never regretted it.

 

If it was me I would have gone for the 09 svdb just for the satisfaction of completing the set, but I wouldn't expect it to appreciate much over the next 5 to 10 years. It has basically flat lined or even decreased slightly over the last 5 years.