My first "Investment Coin".

Coins may or may not be a good investment, but I've selected some criteria.

-US (US coins are always in demand).
- OLD Pre 1865 (Older coins are usually in higher demand)
- Low PCGS Population (Under 1000 total for the year).

I think if one filters like this, and is young (under 30), and buys one to two a year, it may prove rewarding at retirement.

Half cents, IMO are grossly undervalued.

I just bought this.






54 in population for the variety. Not as low population as others, but older.

My theory is older coins did not survive as well as some newer ones, so MAYBE scarcer.

 

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Don't forget the key and semi-key dates. They retain their value and usually go up over time.

 

The coin market can be tricky. Demand is key. These coins will only be worth what someone is willing to pay for them in the future. Be sure to have other "investments" as well. TC

 

I agree that half cents are undervalued, they aren't super popular either and seem to be underappreciated too, when I 1st started collecting I couldn't understand why
A choice vf IMO, I wonder what the reverse looks like though......

 

@Detecto92 , nice half cent!

Hard to predict future demand. In general, I'd agree with your criteria for collecting.

 

IMO, these could be sleepers, but only in AU58 and higher. They are nearly impossible to find in those grades.

 

Put the coin away and report back in 20 years. Can't wait to here the results.

 

You're correct. Why is that true? There's a key to "appropriate" investing in the answer.

Lovely, unmolested piece. I'd be proud to own it, and would go to the upper end of grade price to have it.

 

I think topcat expressed it best. Try this in the future - if you buy a $100 coin, then invest $100(even if it is just a CD to start with). Then down the road you can compare the values. I just shudder when I hear investment and coin. My opinion only. ON a side note I got lucky and some of the best money I made was with coins from the mint(yes moderns) - when I sold them gold was close to 2k and platinum was I think a little over 2k. Some of the 3 coin and 5 coin sets brought really good money. Again not something I would recommend.

Bottom line - you bought a nice coin. Enjoy it for its numismatic value and history not the amount of money it "may" or "may not" be worth in the future. My half-cent worth of opinion for today.

 

I agree with Topcat. Demand is the real wildcard here, and is something you can never predict. Yes, half cents are undervalued versus other US coins, but they have been for a century. What will change that fact? It could get worst. I completely followed your logic OP yet its not that simple. It very well might turn out buying bags of new coins at face would have been the best move, or modern mint products, or simply bullion. No way of telling, that is why, while I know there is value in my collection, I never consider it an "investment". I consider wasted hobby money.

Now, another argument, a stronger one, would be to buy only coins that fit your criteria because it forces you to think about your purchase, and buy truly scarce coins which historically have held their value, (meaning they will cost more in the future to buy). That is a stronger argument IMHO and still a hobby-centric one.

 

As good a theory as any other I've heard over the years. But like @mark_h said, the words investment and coins in the same sentence makes me cringe!

 

So is pretty much every seated coin, especially half dimes through quarters. Mintages very low, price very low. Looking for a post-1865 sleeper? Try the 1914-S Barber Quarter or 1927-S SLQ. Low mintages, low prices.

But true, the half cent is undervalued.

 

Good point. Unless an item has sentimental value, it is very hard to keep it for that long when you are so young. Life happens... What if someone offers him 2x what he paid for it next year or the year after, etc? What if he needs cash for food, school or buying a house? I'll bet we see it on the BST forum or eBay sooner than later.

 

ALL collectibles go in cycles, and sometimes a previously collected field can totally drop out of favor due to changes in the collecting population. Demand is what makes a market. There might only be 1 of a given item, but if no one is interested in it, it won't sell. There are PLENTY of coin series that are "undervalued" given relative rarity. However, many of these coin series have NEVER had a large collecting base. Given that is the case, the odds are that they never will.

I first started in coins back in the late 1980's as a (relatively small) financial diversification move. Unbeknownst to me it was a bubble in the making, due to the recent introduction of TPG slabs. I made a lot of (paper) money in a year or so, and then had my head handed to me on a platter. In many series prices have STILL not gotten back to where they were at their height in the late 1980's (although gradeflation has caused many of the coins graded back then to be cracked out and regraded a point or two higher). In the early 1990's I sold many of the coins that I had bought.

During this process, I found that coins were attractive little suckers in and of themselves and transitioned into becoming a collector, not an investor. Since then I have done better financially on coins.

Buy what you like, with DISPOSABLE income, and enjoy it. That is your true Return on Investment. If it goes up in value, so much the better. If not, c'est la vie.

 

I looked in my red book from 1992 , and the VF-20 price is $80

I don't have a red book from today, but I checked Numismedia, which is usually pretty fair, and it's $228.

That is a 185 percent change in 24 years, or 4.46% annual growth.

I plan on retiring in 36 years.

Using these two data points, the coin should be worth $1,096.

So if we eliminate any other factors, 4.46 return is not that bad.

Like the above posters have commented, ANY investment is tricky, but one must do some careful research.

I need to buy a redbook from each year, starting in 1982 until 2016, then graph all the "undervalued" coins, to see which ones have the best upward trends, eliminating any that dip really hard, besides dips from the drop in silver prices.

The GOOD thing about investing in coins, unlike stocks, is that it's still a tangible investment, unlike a piece of paper or numbers on a screen.

 

Here is the PCGS price trend on my coin, as you can see, it's pretty good.

 

The next hoard discovery could ruin all that. It's why smart collectors argue against "investment" numismatics. See: 1903-O Morgan.

 

All the top "losers" are modern coins.

 

With investment, there is always risk. Knowing what that risk is allows for sound judgment calls.

From an entertainment and diversification standpoint, coins make a nice hobby while holding and usually increasing value.

I see more and more people diversifying with coins, bullion and even stamps again.

But these aren't exactly a substitute for a good savings account and 401k. Just a small hedge and - like any other art or collectible - the market seems to be ever increasing as the population grows around the world.

 

Small hedge is right. I recommend no more than 20% of your portfolio in coins.