As much as this is a hobby about passion and NOT investment, good coins are costly and should be a reasonable store of wealth over long term, so I have some questions. Does the coin market fluctuate over the long term? Does it go in and out of style or have bubbles and busts? I've been a student of economic asset bubbles lately so its interesting to me. Any anecdotal input from long time collectors/ dealers would be awesome.
It is my impression over 35 years of collecting that prices kinda keep pace with inflation, but I haven't noticed what I would call bobbles or busts. Although I have seen fluctuation up and down as a result of large quantities (read that as hoards) being discovered and released for sale. The same can be said for fewer coins of certain examples being offered. But all-in-all, ancient coin collecting is not like the stock market imho.
For what it is worth, I had the same question and there was thread on this subject on Forum that I can’t find right now. My takeaways were stamps collapsed due to a speculation boom and bust and never recovered. Likewise, US Coins dropped 25% or more in the past year or two due to over-speculation by non-collectors on slabbed coins. Ancient coins (so far) have avoided this type of externally generated boom-bust cycle. Ancient coins peaked in 2008 and still haven’t recovered to pre-2008 recession prices, but they are rising slowly and steadily. That’s what that thread concluded. I’m interested to hear what folks here think as well.
That's really not an accurate picture of US coins or why. I just feel it necessary to point that out so people have accurate information.
Thanks for the great replies. A store of wealth tracking inflation is more than enough for me considering the enjoyment I get from owning, and I never intend to sell anyway. Would hate to see the hobby ruined by hordes of return hungry speculators looking to make a buck on something they neither undertand nor appreciate.
There was a giant bubble in the coin market around 1990 (I think) because a bunch of people had the bright idea to put rare coins into retirement accounts. PCGS' rare coin index chart is entertaining, although it's not the last word on the topic: The spike in 1980 is from the Hunt brothers driving silver from a few bucks an ounce up to nearly $50. The spike in 1989 is from the IRA debacle. The rest of the fluctuations look small by comparison, but if you bought coins from this index in 2008 as an "investment", you're down 20% or so.
Thanks Jeff B. Seeing how QE fueled asset prices in general are right now, I was a little worried we might be at the top of one of those spikes a-la 1989. I'm officially at ease!
Nice graph. It shows the recent decline in US coin prices referenced in that other thread. The Hunt brothers was an amazing time. I recall trying to sell the silver dollars I had thinking I was rich, but no dealer in town would touch them at any price. They seemed convinced the Hunts wouldn’t pull it off and they’d be stuck holding the bag. Pretty shrewd on their part.
The problem is that chart says nothing. Some things are higher than they were then, others like classic commens and common Morgans are WAY down. Even in the way down though there are still exceptions. Do I agree that coins aren't a good investment for the coins 99 percent of people can afford from a purely financial statement yes. But that catch all chart really is a terrible representation with what it includes. There is a lot more to it than that. If you can enjoy something for years and lose say 10-20 percent so what. Think of it as a rental fee as long as you actually enjoy what you are buying and not just buying it hoping to make money. If you go to a restaurant, concert, movies ect your money is 100 percent gone. Even other hobbies most of it goes away if you tried to sell, but enjoying it has a value. All that said investment wise yes stick to stocks you will do much better. But if you love the coin whether it is an ancient, a US coin, World Coin, Token, Medal ect as long as you weren't completely reckless in the purchase and know you got something real enjoy it and whatever happens when you sell happens. Basically just be smart about the purchases and buy things that appeal to you where the enjoyment of ownership is worth the price
