On the fence - silver vs. rare coins

I am debating selling a large collection of 90% silver halves and using the money towards high grade rare coins.

I have kept the halves as a hedge against inflation, but, I am at the point now where I am thinking that the rare high grades would be a better long term investment. The 90% halves are only tied to spot pricing but are a much more liquid asset and easier to sell for what they are worth.

Any thoughts on this? If anything I could at least downgrade the size of my safe deposit box.

 

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Don't invest in coins. If you are looking to downsize, sell the silver and buy some gold (at the right time). TC

 

You would be selling near a 5-year bottom. I am citing a fact, not an opinion. But here's the opinion that goes with your question -- if something bad happens, MANY fewer buyers for high-grade numismatic coins, and, a buyer's market. A lot of coins will come out of hiding to buy food, clothing, fuel, etc., and that will hurt your results.



I bought 3 rolls of 90% dimes today for $60/roll, a flat 12x, plus I made the guy deliver them. As I have spelled out in the past, these are for my heirs. The only way I'd ever sell them is to buy food, prescriptions, or ammo. I don't try to "time" purchases of PM's.



This is the 5-year gold-to-silver price ratio. If you buy gold here, and the ratio drops from its current ~71, you would have been better off holding your silver.

 

Very good thoughts. I agree.

 

Timing markets is a shot in the dark. If you've decided to sell, do so and don't look back. No law says you have to sell all at once.

 

That's true. But in a year or ten, this may look like a bottom, or it may look like a last twitch upward before a big fall. You cannot tell in advance.

 

What was your purpose in buying the halves? What would be your purpose in buying rare coins? You said as a hedge against inflation for the former, but was that all? Where you hoping that some day you may need some around to help pay the bills, i.e. barter with them? Halves would be easy to sell or buying things with directly. Rare coins would take time to sell. Halves would only go up at the same rate as silver, which probably be in the up direction if things are at the point where you need them. Rare coins will also go up in the long run but if things collapse (when you really need the money) they may not be as saleable.

Which should you do? I don't know. But I do know that you need to understand why you even asked the question. Personally I would rather own 1000 halves (worth about $6125 melt as I type) than a single coin worth $6125. But others may very well disagree.

 

That is the direction I am leaning. Just keeping tem. There is a much better appeal to the rare coins but your points are right and I agree.

 

Why sell all at once? Instead, I'd sell one small lot a month.

And spread it out over several years. That'll give you time to find good buys on rare coins -- and become knowledgeable enough to hopefully avoid costly mistakes.

 

If it's because you may eventually sell for need then I think you keep the halves. I don't personally buy coins as investment. I buy almost solely out of numismatic joy. Admittedly, I have considered purchasing some ASE's just to have something close to spot but just about everything I own has numismatic value.

 

In a down market the general population will not want to spend a ton of money on high grade coins. But it will be easier to sell many lower cost coins.

silver vs gold. Silver is once again easier to sell because it costs less. Run yourself an experiment and ask your neighbors if they would buy a 1oz ASE vs AGE. They'd like the AGE, but would only afford the ASE.

Junk silver is another thing altogether in my regards. You have to have an educated buyer to take it above face value, at a silver/spot value.

I have a coin collection with most of them bullion based.
I also have silver & gold, which I consider totally separate. Not for a hedge against inflation but for holding wealth. I started investing back in the 80s, so I look at the long overall up trend in PM valuations.

The most important factor in any strategy (bond, stocks, PMs, real estate, etc) is identifying what your "buy" range is, and when your "sell" range is if you want to sell.

For instance, currently I'll only buy ASEs if I can get them for under $20. $20.60 ... nope, I'll wait. If I can sell them later for $26+ then I'll sell them .. or maybe I'll keep them as they are a method of holding wealth for me.

I'm not sure, but I don't know the numismatic coins in relation to PM spot pricing, stock market, etc nor even basic supply/demand. As mentioned in a down market it can easily be a buyers market, as they can push the price lower with less people wanting to buy.

The more you want to sell fast for money, the more leverage a buyer has. So I don't know what it's like having high grade coins as a hedge against the economy. For storing wealth it's good but you'll want to keep it beyond any economic downturn, which means it's not good for quick cash in a downturn.

How were numismatics during the economic collapse in 2008-2011 time frame ?
All I know is when I *had* sell some modern platinum & gold US bullion based coins, it was below spot price. But I needed the money - and this was at a well-regarded rare coin/bullion dealer. Before I sold it, I asked them how much it would cost to buy it even the next day ... basically twice the price ... a buyers' market.

To me the best hedge against inflation is some investment that is based on a secured investment such as senior secured stocks, etc.

But do your research and make sure your research is based on various economic conditions and eliminate your biases and be completely objective.

 

senior secured stocks?!

What the heck is that? Do you mean a preferred stock? If so, most don't even keep up with inflation. I mean real inflation, not BLS baloney; presently a very high risk interest rate play.

Google result for that term = a grand total of 5 hits, none of which make sense.

 

so coins vs cash is relatively the same over a long period of time?

 

Not necessarily, but I suspect the good times are over, as household debt has exploded in the past 30 years, and the various collectibles are the lowest-hanging fruit on the tree when there's a problem. Ask the average antique shop owner, which is a broader measure than coins and stamps.

 

To me it depends on what your collecting goals are. For me, I went into collecting coins as a hobby first, investment second. You could sit on the silver a little while longer to see what the bullion market does. As others on this thread have said, the rare coin market has been flat for some time; adjusting for inflation probably gone down. Again, what are your goals as a coin collector, to build a collection or as an investment?

 

Interest rates guide investment strategies...1% should mean a booming coin market, but the number of collectors with deep pockets has dwindled substantially, and new "fathers'" coin collections hit the market every day.

You see it when the primary interest of many juniors seems to be flipping and/or squiggly lines and warts on pocket-change Lincolns. Long ago, you weren't a "collector" until you were working on a dozen Whitman folders and subscribed to Coin World, and even that barely qualified you...

 

No, that's not "a buyer's market", that's an abusive dealer.

A 100% markup on quick buyback of the same items is abusive, whether it's a buyer's or seller's market. They might pay low and sell low, or pay high and sell high, but if they pay low and sell high, do business elsewhere.

 

My thoughts exactly. Sounded like he knew the seller needed to sell and took advantage of the situation squeezing him hard on it