To Slab or Not To Slab...What's the Right Investment Choice?

Y'all,

Ok, now I started with my questions, they just won't stop!!

I have only been "seriously" collecting for a couple of months now...and I've probably made a zillion mistakes so far. My primary drive for collecting is split between just the pure enjoyment I get out of doing it and the need to invest our extra cash before we just blow it on stupid stuff. We've tried a dozen ways to save money and can't ever seem to leave it alone. So far, this is about the only thing that has actually worked...giving us a start on a nest egg.

I should have probably asked these questions before I started my "binge" of buying...hindsight is 20/20. Since Christmas, I have spent ~$2200 on coins....all of them from Ebay and all of them slabbed, 90% with PCGS the other 10% with NGC. Now before you cringe and holler at me, I have sat down with the Heritage Sheets (as I saw a posting about the PCGS sheets being high) and the value that these just over 200 slabs comes to is ~$5000. I have just about filled out a series of Jeff Proofs (1973-date, all PF69), Roosie Proofs (1972-date, all PF69 & a couple of 70's) and very nearly the entire Statehood Proof Set(completed clad and need 1999 silver; all PF69 and 70). I have really been drawn to the modern commemoratives, but they are bit more pricey and I haven't been as active on them. Additionally, I have been hitting PF69 on the Lincoln 1c, Kennedy Halves, Wash 25c as well as the circulation strikes on the Statehoods, some full-step Jeffs and full-band Roosies. In all, I have only found one coin that I paid more than the Wholesale for, while the huge majority of the rest have been at least 1/2 to 2/3 below wholesale.

As I have been seeing more and more coinage across my desk (my mailman is trying to figure out what kind of racket I have going) I have been paying more and more attention to what my money is getting and trying to understand why one slabbed coin seems to command a higher premium than another slab of an identical coin. I thing I have seen is a variety in the strength of the strike and have been gravitating towards those that are better struck. Lately, as I have been reading this forum, I have been questioning my methods.....I know, buy the coin, not the slab...I am learning!!

So I humbly ask y'all...is this an intelligent approach towards putting money away by investing it in...well...money? Is it better to have a coin that has been graded by an accepted (if not the strictest) grading company vs. having an ungraded coin that can be at the mercy of a subjective dealer? And given my inexperience with grading, is it not safer (until I can learn on my own) to trust the grading company over the possibly shoddy dealer?

Also, as you can tell, I am all over the map on what I am collecting...granted, all so far have been moderns, but I am quite interested in a number of classics....the older nickels and dimes really have my attention. But what about the more precious metals? Should I hock the slabs and convert that cash into gold coins? Do they tend to keep their value better? (I really like the Indian Head 2.50).

This is tough trying to balance the numismatic learning with investing our family dough and still enjoying what I am doing.

*sigh*....ok....lemme have it.....

-- adrian

 

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Oh man, you opened it up now.... Your gonna get 63 different opinions... All from well meaning Folks... But when it comes to investments... It gets really touchy...


All I'll say is that I really hope that one day if I choose to sell my (what will be a ) mini-hoard off, it brings in some good profits... I'm going to start logging what I pay or everything on a excel sheet...

But I am really doing it for the love of Coins... I mean look, I subscribed to the new PDs... Pretty much everyone hates'em...

Good luck, keep reading, learning and aquiring, you get better at it all as you go...

 

Well, you're going 100 miles per hour, that's for sure! Before you get in any deeper, it might pay to try a little experiment to see if this "investment" is really working out. You say you spend $2000 and have about $5000 in theoretical market value. I would recommend selling the whole lot of them either as singles or in groups and see what you can get for them. If the amount is close to the 5G's, congratulations and keep doing what you are doing. If it is less than 2G's, that will be the signal to rethink everything before you bet any more of the family fortune. Sometimes you don't have what you think you have or what the auction sites say you should have.

Regarding gold coins, I think they are great as collectibles and as investments as long as you don't overpay.

 

Reread the above post.

Reread it again...and again...and again until you can recite it from memory.

GDJMSP's words couldn't be more true.

Coins are not an investment. To invest in coins is a sure way (and I do mean SURE) to lose money. Invest in the stock market, real estate, or bullion -- not collectible coins, and certainly not the modern coins entombed in plastic.

I don't mean to sound harsh, but the best thing you could probably do is sell a few (or all) of your coins, take your losses (and learn a VERY VALUABLE LESSON), and collect coins, not holders. I would also strongly suggest you go on a buying strike for ONE YEAR. Take that year and look at and read about as many coins as possible -- then start buying.

I like the idea of rolling into gold coins -- look at foreign coins that can be found for a very small premium over spot. Things like the Mexico 50 pesos, Krugerrands, Maple Leaves, and Pandas. Some have very attractive designs and they can often be found for between $20 and $50 of spot. If foreign coins don't do it for you, you might also consider generic US gold -- but realize the downside is much, much greater as grading (and all the ripoffs associated with it) becomes part of the equation.

 

When you have coin slabbed do you save mint packaging?

No right or wrong answers here, just wondering: When you folks have a coin sent out and slabbed, do you save all the nice packaging that comes with it from the mint? (i.e. blue cardboard box, velvet box, etc.)

It seems like some collectors would want all that if you try to resell, but the fact is, nobody is going to tear it out of the slab to stick it back in the jewelry case, are they? I am big on getting rid of clutter, so want to know if there is any value to holding onto all this packaging (apart from the COA, that's probably worth holding onto)

 

lots of people who would want to buy your certified coins would expect the packing with them. could be the difference between someone buying yours or someone elses. I think the Gold anniversary set boxes are going for something like $50 .

The gold and silver anniversary sets and the 2006w silver eagles are going for nice premiums over what they were issued at even in the ungraded sets but there are a lot of modern coins that are not. Man it is just hard to pick them

 

I completely agree. If you are looking for an investment, and you like coins, about the best you can do is buy gold [and silver] bullion coins for close to melt value. There is an enormous variety to choose from. I also find many modern commemorative gold and silver coins that sell for close to melt value also, particularly the ones from the 1980s with relatively high mintages. All of these could simultaneously satisfy your collector's instinct while providing a reasonable chance of profiting from any rise in gold and silver bullion prices.

I think a lot of the risk of investing in coins goes away when you stop purchasing coins with very large numismatic premiums over melt value. The bid/ask spreads are just too large to make money [reliably] from them.

 

Wow!
That's the truth; I really enjoy the hobby, and always feel that whatever they are worth in the end is a plus while having fun

 

I'm not sure what you mean by "Heritage sheets", but I guarantee you the PCGS prices are very high. No way will you sell for those prices.

Those numbers are for shipping insurance purposes - submitters place any value they like on submitted parcels, and the TPGs insure them at that value upon return. The PCGS prices are used as guidelines.

I strongly advise trying your hand at selling a few and see how you do. Personally, I find it a lot of fun. It is definitely an EDUCATION.

So is READING. I'm amazed at the amount of literature. Lots of good stuff. Many titles have appeared on this site - in fact, there was a great thread recently "What coin books have you read lately ?" or something like that.

The ANA website has lots of reading material... here's the link...

http://www.money.org/source/Orders/index.cfm?section=unknown&task=1&CATEGORY=BOOKS&DESCRIPTION=Books&CFTOKEN=60719481&continue=1&SEARCH_TYPE=find

I've heard it said that a few exceptional pieces are better than 100s of common ones.

Put another way... better to "invest" $2000 in two coins - $1000 each -than 200 coins $10 each. Obviously, plopping down $1000 on a piece requires building decisions on knowledge.

But I also agree that this is a hobby. Feel the love.

Some folks do make money.

 

It depends.

With modern mint pieces intended for collectors / investors, even the strictest graders (NGC / PCGS) give out almost all 69s and 70s.

No surprise... modern minting techniques + no circulation = 69s and 70s.

Probably little value in submitting the new stuff... I don't think it adds much value. In some cases, getting a 70 from The Top Two TPGs will add some value... sometimes a lot (i.e. PR70DC $50 Buffaloes trade for over $1200).

Since grading costs $20 - $30, it makes little sense to certify a piece worth $20. The coin's value should be large compared to grading fees.

Is it better to use stricter graders ? Absolutely.

Use only PCGS, NGC, ANACS, or ICG. Ignore all others.

 

I have been buying many silver Blue Ikes lately for average price of 4.75 each, although they are not expensive coins I like them, and think they are under priced the fact they have around 3.60 worth of silver in them which makes them a bargain .

This past Sunday I got few silver Ikes PCGS Proof DCAM 68 for 14.00 each . That’s less then the slap fee

pics of one of them 40% silver DCAM PR-68 I picked up @ Burlington NJ coin show not bad for 14.

 

(1) Yes - hold the boxes and COA's, some people want them and some people will buy them separately. You could actually auction them off.
(2) I think everything said is true - you have to be very astute to make money doing this. I believe they knew what they are talking about.

One thing I want to caution you on when selling - I use not only heritage, but also ebay and dealers to try to determine what I will bid on a coin. So if I see you winning them at wholesale then I will keep bidding on the coin in question until I win at or below your cost(including shipping and insurance). It does not mean you won't get lucky and have a bidding war on your coin, but you also might not get what you paid(including shipping and handling). Also I am likely to bid less on a coin from a new seller that has not proven himself. I do not do as much buying on ebay as you, but I look almost nightly at auctions.

OOPS - forgot to mention. Sounds like you have done a decent job to start with - I recommend keeping the coins and enjoying them for a few years.

Good luck!

 

I kind of have to disagree with a little of what was said so far. I don't think the test should be if you are able to sell today for the same price you paid as being a gauge on if it has great invesment potential. Many coins take off in later years and those that bought them when they were cheap were the ones to see the real appreciation down the road. But the question might be will the proof coins you are collecting today be in that category?

As far as the difference as to why some coins are worth more than others that seem to be the same, well that is a study all by itself. You can look at many different sets of the same type of coin and often the coin with the lowest mintage is the one that will cost you the most [but not always]. There is also a conditional rarity and other factors.

But i have to say if you plan to hold your coins for many years I like what you are doing, but would suggest you do buy the more expensive coins and not go for quantity. There are many coins that by themsleves would be as valuable or more than all of the ones you have bought to date.

It is easier as others have said to sell one coin than many, so as a starter I would say go for higher priced coins and stick to graded ones like you are until you become an expert at grading.

You are also better off getting rare coins over common ones. It takes less demand to raise the price of a rare coin, so those have the best chance of appreciating generally.

 

But then that kills the idea for him to see how good the price guides are....if the guides say that his coins are worth $5k and he only has $2k in the coins then the time to sell is NOW---true, down the road it could be more---but it could be less...the modern coin market has taken a beating and isn't at the place it was a few years ago.
If the coin price guides are right then he has made an easy $3k....who is going to start taking bets on if the guides are right or if he has paid normal price.

I agree with the guys above---some the greatest things you can learn about coins can ONLY be learned through selling.
I used to always think that I would never sell any of my collection--then the time came that I needed some money and I started to sell some coins and I learned ALOT about the market and how it works. I've learned that just because the price guides says $50 for such and such a coin, and if you only pay $5 there is more than likely a reason--and that reason might be that no one is interested in that coin....you might have to hold it years....
Since selling I've gone new directions with my collecting---I've met goals...and I've made money and I've lost money---but I would never trade what I've learned from selling coins for anything.
Alot of people look at price guides and when the prices don't move from one month to the next they think that it means the market is stable--that might not be the case.
Go to shows---go to auctions---and best of all, set up at a coin show and buy and sell and trade coins and you will see what coins are "good coins to buy" and what ones could put a dealer out of business.
I set up at a show and took some Junk Silver Morgan dollars---a guy offered to trade 6 ASE for 6 Morgan Dollars---I said ok because I like ASE alot more than Morgan Dollars---I didn't have the ASE 5 min. but that another guy standing there said how much you want for the ASE...I said that I wasn't sure I was going to sell them and he offers me $15-$20 each.....needless to say I sold.
I had some Mint Sets there and I didn't sell a one---
You know what this tells me---the price guides don't show much if any changes in the prices of the ASE....and most of the time they only change it when Bullion changes....but I've seen ASE go from $7 each to $15-$20 each.....
On price guides it shows some movement on Mint Sets---heck...don't I wish.....

I guess maybe I'm blowing alot of hot air here---and I'm sorry--but I think I'm trying to say that the BEST knowledge that a collector can gain is through selling coins.

Speedy

 

I think investing in Moderns is purdy much like all other investments. Where as ya gotta be in it for the long haul. I have seen some unrealistic prices on moderns. But I tend too think of these as an projection/extrapolation of these coins 25+ yrs down the road. This does not stop me from buying moderns. It was our great grand parents saving moderns that gave us the high grade coins that are so collectable today. But 100 yrs ago they were only worth a buck. Rarely do I ever find high grades in rolls that ever exceed 64/65. I am although addicted too opening rolls. Each coin has its own personality and I enjoy just going through the batch. And there is that possibility that lightning may strike and you will get a one of a kind variety. Buying searched slabbed coins you don't get that. But on the other hand, if you are buying a slabbed coin at current market values. Would you still have too sit on it another 25 yrs before it gains additional value again? My theory is that the purist numismatist is in it for the love of the coin, and the hunt, and not the investment. Ok there is my shinny 2 cents.

 

I would think that since he just bought the coins on Ebay I doubt he would get anything more than he paid on Ebay unless he cherrypicked coins which is what he isn't doing. It's kind of like the commercial where the guy buys the painting at the auction and then right after the gavel hits down he says he wants to sell it.

I think there is money to be made in modern coins, those that bought some of the moderns lately have done very well [and that does include selling them after purchase]. It seems you have to be very selective and buy ungraded and cherrypick coins. For example I have no idea why the 2006 W UNC gold 1/2 ounce, 1/4 ounce, and 1/10 ounce Eagle coins are currently trading as low as they are. If I was to buy a modern gold coin today it would be those or wait for other new issues to come out [as far as pure investment goes]. Even the modern gold commemorative series has potential or the silver commemoratives at under 25,000 mintage.

 

Speedy,

Very astute observations about ASEs. If the goal is to make money, it's more important to know what is easiest to sell and most in demand than it is to buy what you like. I wouldn't be surprised if ASEs were the easiest coin in the world to resell for full value.

 

LOL let me know when them Mint & old Proof sets go up
I love Mint sets and have plenty Just picked up 5 more 1973 anf 4 more 1987 sets this week at a nice price .Even though they do not seem to be popular I can not help myself
I like the blue and proof ikes and SBA's are not popular with a lot of collectors

 

That is just what we are saying.....go back and read the posts.
He said that he has gone to Heritage and checked the price guides that they have and they show that the coins are worth $3k more and therefore he has made a good investment---what I am saying is that rarely are price guides right---while I trust Heritage more than PCGS--If I buy a coin for $200 and Heritage says that the coin is worth $500 then more than likely when I sell it I'm going to get $200----just because a price guide says something doesn't mean its truth.
So therefore we told him that if he wants to make sure that coins are a good investment for him then he should sell the coins NOW at the $5k and see how it works out.
Maybe I'm not plain---and if not I'm sorry---go back and read the posts again.
I bought a 1926-S Buff Nickel---I paid $115 for it and it graded VF---now Heritage said that the coin was worth $400---but yet when I contact DLRC they make an offer of $250....now what one shows the true "market value"?.....I sold it to DLRC and since then have seen a good many of these coins sell for lower than $400....while Heritage Prices do show the true value in most cases, sometimes they can be dead wrong.

Thanks I'm going to be setting up at the show again when they have it and I'm going to try to take more ASE---maybe some of my Strike Throughs !
The other thing I was asked about some were Barber coins----Key dates were RED hot...even for a small show.
I took:
1914-D Cent in PCGS G4
1908-S IHC in VG
1926-S Nickel in NGC VF20
1932-S Quarter in NGC F-15

I went home with only the nickel left---both cents sold almost before the show was opened by another dealer and he sold the IHC again that day to someone else.
The Quarter I used in a trade for a 1909-S IHC in VF----
The only Proof Set that went good was the 1955 Box Proof set....
World coins didn't sell at all---

Will do
The only Mint Sets that I like to pick up now days are:
1981
1973
1970
1996
and such dates---I need to get another 1996 as I traded mine for a Prestige <sp?> Set..I think it is a 1997...

Speedy