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Advice for beginner?
nickvelo
Posts: 14 ✭
Any short insight on what a beginner can / should collect as an investment? Want to diversify as well as have tangible items to pass down to my kids. As in, what are some simple “go to” coins?
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To begin, don't view this as an "investment." Even the guys with many years of experience have a hard time making money on numismatic items these days.
If you want something for "saving" with a potential to go up in price, consider certifed $20 gold pieces. The common dates can be pruchased for modest premiums over the spot price, and if gold goes up, you're a winner. If it goes down, at least you have some assets in gold, which is not a bad thing.
Welcome.
There are many ways you can go. Some good advice will be coming from other posters.
@nickvelo.... Welcome aboard....As stated above, coins in general are not good as investments. The real rarities are priced far out of reach of the normal 'investor'. Certified gold coins (Third Party slabs), and not super rare types, are usually fairly solid for investment.... Gold maintains a fairly steady value and is a hedge against inflation. If you are considering a purchase of a coin for investment, be sure to check resources for pricing/value.... and ask questions here... free advice from experts. Cheers, RickO
I agree with Bill and also, certified $20 gold pieces.
investments are stocks and bonds not coins , making money in coins is a hard and tough route , depends on your personal likes and dislikes as to what to collect
coins for sale at link below
https://photos.google.com/share/AF1QipN4yssCCR7mb5YTVkizir6fW596CzTq42vn9QYHr3yn5e8KWYHA-hyXq9OvXwVMog?key=UVNMVndKbGNVeFdJQVdkb09HcEtFUkYxYmUwamJB
Photos
https://photos.app.goo.gl/EtRaKY4acKbo4asY6
Thank you. The way I should have worded it was “saving” What about silver eagle? Are those worth buying?
Coins are not a good "investment". They are a hobby item.
Hi and welcome to the Forum. You mentioned Silver Eagles. Yes, I think The Eagles can be that jump-start coin/s. Esp for kids to get involved in. Now about the investment aspect, all the advise above can be well taken. One may never know if that certain coin series will ever be that go-to series for rarities in the future?
Getting back to Silver Eagles, it's funny you stated those. The American Silver Eagle series will be changing their design next year. It will be the first time since they came out that they would have taken this step. A very popular group in the coin hobby. Even though, the Eagles are actually in the bullion category. Also to mention, there are also GOLD Eagles as well! Whatever you decide hope you enjoy the ride and to have FUN along the way. Glad to see you here and don't be a stranger. - Joey 😉
"Jesus died for you and for me, Thank you,Jesus"!!!
--- If it should happen I die and leave this world and you want to remember me. Please only remember my opening Sig Line.Investment... well, you’re asking an audience that will likely be geared towards metals and coins. So are you looking for confirmation of what you’ve already decided?
Honestly, I would never look at coins or precious metals as a major investment. If you’re lucky you can make money at it but just as many people lose big.
You need to evaluate your risks and income expectations. I have found that investing in companies with established dividends have performed better for me than coins/metals by far. YMMV.
Rolls of circulated Mercury Dimes and Franklin halves. They're fun to go through, no longer minted, classic design, and they can frequently be purchased close to or slightly above their silver content. Less likely to be counterfeit and they will always be in demand.
"Invest" in what is interesting to you, and hopefully your kids. Lots of estates go to heirs who know nothing of what was collected and even less about what the true value might be. I'm collecting because I like it and I buy what I like. I hope to one day pass what I have to my kids and/or their kids. I feel confident that my collection won't be a burden to them because they're interested in it also, even if they never collect themselves (they're 10 and 6 now, who knows).
I expect my collection to be worth more money for them than what I'm paying for it now, but at best my collection is a store of value, not a true investment.
Shiny coins, relatively rare coins, and metals can usually be expected to at least hold/store value over time. That, combined with the enjoyment that I/we are getting now, makes it all more than worth it. I hope that helped in some way.
Way to pick the most complicated coin. LOL.
Silver eagles are largely bullion coins. They will fluctuate with bullion prices. If you LIKE silver eagles, buy them and enjoy them. If you want to "invest" in silver, the premiums on silver eagles are steep.
Currently, you would pay $5 to $8 over the silver value to buy silver eagles. That means silver would have to go up $5 to $8 (28% to 41%!!!!) for you to break even.
Now, you could buy proof silver eagles as a "numismatic coin", but those also have a premium and they have not done well (with a couple exceptions) in recent years.
If you want to leave something to your kids, buy a mutual fund. You will be far less disappointed than with the coins. There are a few problems with buying coins for the kids:
True story: guy came into the local B&M with a suitcase of common gold coins. His father left him the coin collection and his brother the stamp collection. Guess which one made out WAAAAY better.
Another True Story: 2 out of 3 brothers came in with their share of Dad's coin collection. The 3rd brother got almost $100k for it. The two brothers who came in were at $20k and $30 k respectively.
So if you are going to leave something tangible, you need identical sets of coins which is a little boring.
Third story: 75 year guy brought his collection to me. He needed money for medicine. He had been buying 3 of everything to leave to his kids. He had to sell and got roughly 25% on the dollar. Partly due to overpaying from a particular numismatic mail order house, but also because he was buying common things that have not gone up in 25 years. He was devastated.
Clearly you didn't buy a Hawaiian commem in 1989...
It's always worth posting:
https://pcgs.com/PCGSMedia/graphs/indexallgraph.gif
That was clearly outside of my budget as a 7yr old
I do wish my dad had bought one in the early 70s, though!
I tried to use enough "generally"s and "tend"s to stave off anomaly discussions...but those are fun, too
Well, you asked so here's my advice......
For starters, I'll assume you have a well-funded traditional retirement plan in place. Usually this looks like a 401(k) or something similar. I'll also assume you're carrying no debt and have extra money to put towards a non-traditional investment. If any of this isn't true, stop right there. Coins aren't for you, at least not as an investment. You can participate on a hobby level, but not with any significant part of your net worth.
If you get past those hurdles, consider that those few who can actually make money are usually phenomenally educated with respect to coins, they understand the fluctuations of the market, and they're expert graders in at least a few series. Even then, to make any money you need access to large numbers of coins so that you can locate the good ones and buy them "right".
I wouldn't recommend having more than a few percent of your net worth tied up in numismatics.
If the goal is to earn a return, stick with mutual funds or real estate.
If the goal is to save (short term), stick with money market accounts, possibly bonds.... and then move that money into real estate or mutual funds once you have enough.
If the goal is to find a really enjoyable hobby, become deeply immersed in it, learn a little about history, meet nice folks, and have fun doing it, consider collectible coins. If you're lucky, what you collect will have some residual value when your heirs sell it. If you're really, really lucky they'll make a profit. If they're stupendously lucky, it will outperform more traditional investments.
But, you never know. Even a blind squirrel finds a nut now and then.
I agree with most of the above except for the part about having no debt. Debt is a problem only if the interest rate is high. If you can earn a reasonable return on your money carrying a 30-year mortgage with a 3% interest rate (roughly the case today) makes much more financial sense than paying it all down and forgoing the opportunity to invest that cash.
Also, ETFs have lower fees than mutual funds so those will generally make better investments since few mutual funds outperform their benchmarks over the long term.
Debt is always a problem. Debt = risk, but I don’t expect everyone to agree with me. Economies fail, health problems come up, jobs get lost, situations change....
But, that’s not what the OP is asking.
Debt can absolutely add to risk and enable people to make bad financial decisions but it is merely a financial tool and sometimes that risk can be financially sound and worth taking. Just because something is risky doesn’t mean it’s necessarily a problem. Investing in real estate or mutual funds is risky. Clearly you wouldn’t (and didn’t) advise everyone to just hold cash.
A couple years ago I asked the same question and received mostly the same great answers. That's when I realized there are a ton of knowledgeable people here that go way beyond just coins. Also realized that throwing hundreds of dollars around buying coins with or even w/o a premium is not a good investment. It seems they always sell for less than what you paid...
Which to me is hunting coins that are valuable and having them graded and by PCGS for the optimum return. For this you will pay a few thousand in tuition and lessons fees. But you will gain a wealth of knowledge and appreciation for which ever series you choose and be able to invest only 40.00 per coin.
Where you are financially as in how much can you play with or actually want to invest with will determine path A or B for the first fork.
I don't have have stacks of cash lying around so I got directed down path B or possibly C
If you do have stacks of cash ignore this post and refer to jmlanzaf, Bryce and others...
Happy Hunting!
I'm not sure why so many people are saying that coins aren't a good investment. The majority of the coins that I purchased 15 - 20 years ago have gone up in value substantially. Maybe I was just lucky.
Wisdom has been chasing you but, you've always been faster
The problem I have with silver is storage. If a Silver Eagle is worth a round number, like $20, you would 50 coins to get to $1,000. If you want $10,000, that’s 500 coins. After awhile the weight and bulk add up.
Ditto to most of the above comments. Above all, collect what YOU like and are interested in. Read and learn as much as you can about coins YOU like and are interested in. This will increase your chances of making money, but as stated above, that's easier said than done.
Well they better go up in value or they're not even keeping up with inflation. Some of it depends on what you bought too. Gold rarities and silver type are different animals.
Over the last 20 years, the Dow Jones averaged 7.07%
If you bought a coin for $1000 20 years ago it would have to be worth more than $3,900 today to have done better than $1000 placed in a mutual fund that tracks the Dow. The S&P 500 did 5.90% during that time, which equates to $3,150.
And that's if you are able to personally locate a retail buyer at that price. Dealers don't pay retail and auction houses take a cut of the sale so if you go that route, you'll need the coin to be worth even more if you're planning on getting $3,900.
I started off "collecting" bullion as an investment and I can attest that it was a very poor decision. I have been "underwater" on my coins pretty much since day 1, which was about 2008 for me. "Dollar cost averaging" as stackers suggest has only added to my woes!
More recently I got into collecting graded coins in nice condition. Best advice I got here on the forum that I have taken to heart is to pick your series and stick to it. Don't stray or dabble in others. I have a 20th century gold type set that I have been upgrading - keeps the overall investment limited and attention focused. I have been tempted by other coins outside my wheelhouse but luckly I have mostly avoided the slippery slope.
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Thanks everyone. I have all the usual investments in place, own a home with low interest, max out my IRA, and invest even more in stocks, etc. Was looking into coins as a way to diversify, as well as have something physical, which adds a cool factor. Not expecting a $20 coin to be worth 3k in 30 years.
Was mainly looking for a list of a few coins that are worth buying, and that will hold value, gain some value over decades.
As in - as a sports card collector. A 1989 Griffey has always seemed to be a card collectors like, and has increased in value over time.
Through all the posts, I think I got a good picture of what to look for.
Thanks again.
Knowing a little better where your head and situation are, I think you should go for "keys" and quality. There's always interest in key dates and super quality, which can limit your downside and maximize your potential upside. They're also the most fun to own and show off (I've heard, I guess
)
If any specifics on those "keys" - that'd be helpful!
I think I have hardcopies of lists I like better, and they're available online all over the place, but here's a simple place to start:
https://en.wikipedia.org/wiki/Key_date
@nickvelo,
So nice to hear. It sounds like you're doing it right. I look at coins as a way to diversify a bit, have a bunch of fun, and learn as I go. Other things usually bring a better financial return, but coins are a whole lot more interesting than a number in a bank account. It never hurts a bit to stack a little gold or silver too, but treat it as an interesting sideshow, not the star of your investment portfolio.
From an enjoyment/investment perspective, it's hard to beat pre-1933 US gold in issues and grades with low numismatic premiums. If gold goes up, you win. If it doesn't, you still have really enjoyable coins. Early US type coins are rare (in comparison) and in my opinion really, really interesting. Early copper, small-eagle silver, and flowing hair dollars & half-dollars are always going to hold the interest of collectors.
Be aware that the US coin market is fairly mature and prices are reasonably well-established. Said differently, there aren't likely to be too many areas with enormous upside financial potential.
Morgans, Peace dollars, Walkers, and Buffalo nickels are always popular and have a large collector base. Learn as you go and don't buy things you don't understand. Educate yourself. Stay away from fakes, problem coins, and "deals" that aren't. If you really want to do it right, cultivate a relationship with a few dealers who know your goals and can steer you away from trouble.
I think you are off to a great start by joining the forum and seeking input from members. I think this forum has a great representation of Intelligent collectors of the different issues that can be collected. I would stay your hand for awhile, see what others are interested in and view the photos that are posted. Over time, you will get better idea of which coins interest YOU the most and what makes a great coin great. My mistake as a new collector was lack of patience.
Just sit back and read current and past post from different categories! Your direction will change a few times just from what you'll learn from the responses.
Just study any coin, learn as much about that coin as possible! If you find yourself not being able to wait to learn more, then this may not be your best interest! You should feel it naturally before wasting lots of unnecessary time and money!
And if you do decide to collect as your Hobby, remember, its built on what you believe is interesting or different, no one else.
Everyone else will just have an opinion of YOUR collection.
New collectors should start small. Even the most conscientious of us make mistakes early on. The best way to learn is to read and look at lots of coins.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
The members here are a great resource, use them. Also the PCGS website itself has answered a lot of my questions. Lots of info.
As with any "investment" there are nuances to master that you cannot acquire without experience, experience and more experience. You can make money off of stocks, real estate, precious metals, antique cars, comic books, baseball cards, etc. only if you know what you are doing. You have to master the art of when to buy, how long to hold, and when to sell.
There have been cases where people bought at the right time, a peak in prices occurred not long after, they did not sell at that moment as they thought it would only go higher, and then they ended up missing the peak and sold at a loss when they needed to cash out and could not hold any longer.
If one does not time the stocks just right, it can be a money loser all the same.
I see there was wide agreement on the $20 pre-1933 USA gold pieces. Just a few years ago, you could obtain fairly good condition examples for a little over the melt value. Gold had a lower melt value back then, so if you bought at that time, you would be sitting on a profit. The best condition examples of these coins are rarer and go for much higher premiums. They are the true collector coin because the value is not entirely dependent on gold, but on its numismatic/historical value. So, if gold goes down, the price is not as affected. The downside to purchasing such coins is be careful not to over pay.
Since you know baseball cards, you will notice that the Gem Mint Griffey 1989 Upper Deck card is the one that truly soared in value this past year. The Mint card went up too, but not at the same rate of the Gem Mint examples. Buying the best condition example of a certain coin or baseball card makes a difference in value potential too, but only if you do not over pay in the beginning. I have been involved in both hobbies for decades and I have made my share of mistakes early on.
Bottom line, be a patient student and collect what you like.
BST: Tennessebanker, Downtown1974, LarkinCollector, nendee
You would have been much better off with a stock fund. (up 171x the investment)
You would probably have even done better just with Treasury bonds (up 26x the investment). I'm not sure the Hawaiian is up more than that.
Have they gone up more than the stock market. That's the issue. Have they even gone up more than inflation?
Here is a link to a video that discusses collectors vs. investors.
https://www.money.org/buying-coins-video
How would you feel about providing a few examples?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
That's the short way of saying it. The longer version is that the DOW went nowhere for 11 yrs (2000-2011)....and then up for the past 9 yrs.....most of that in the past several years. Coins did fabulously well from 2000-2008. Coins can be a great contrarian play while the SM is on hiatus for a decade or longer. Nothing wrong with diversifying 5-15% of one's wealth into precious metals, rare coins, and other tangible items. Usually the best results are from those who study these markets, can pick out winners from years of being in the trenches.
I can think of a number of coins bought out of the 2002 Goldberg's Long Beach sale that have done quite well since then. Of course most of that gain occurred by 2008 - easy doubles and triples....and even better. Must any decent gem type coin bought out of that sale has done quite well. Same for Vermeulle, Benson 1 & 2 and other major sales of that 2000-2004 period including Queller. One would have had a field day buying out of Auction in Jan FUN 2009 through much of 2011...heavily depressed prices and panic selling. Buy nice coins that don't show up that often when things are weak. You could have bought TDN's ex-1873-cc Trade Dollar out of Vermeulle 2001 (raw) for $74,750.
For investment purposes, all of the costs need to be factored in before declaring victory: inflation, SDB, insurance, the tax man, (re)grading fees, and selling costs. The latter will vary, depending on the venue and what is being sold. Estimate this at 20%, absent any more precise information (could range from 10% to 50%), for items that are not bullion. If you are shopping around your coins, add your time.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
Advice for beginner?
run, quickly, before it's too late.
The total return of the DOW from June 2000 to June 2011 is 45% (3.6% per year)
With the name @dreamcrusher ....well...LOL
You asked for short & simple, lol. Not in this game.
Just give me a "Go to" coin.
I like the 1794 myself.
https://www.pcgs.com/prices/detail/flowing-hair-dollar/736/most-active
To reiterate what one other said, develop a relationship with one or two dealers to help guide you through the process. Be willing to pay a premium for the highest quality coins
Before continuing on and reading all the replies and especially the OP's later reply this is not really where I want I want my reply to go but quote @BryceM just to drive home the conviction than I've had for as long as I can remember that if a person has debt at all EVERYTHING they spend their money on besides paying down the debt is on interest. Of course I understand leverage and using debt to create income or wealth but those things have been covered by previous posters in fine fashion....
That being said:
My opinion is to have fun with what you collect... buy for the art, or the historical aspect, or the personal meaning or philosophy that goes along with what appeals to you. Find things that bring you some kind of enjoyment and it will occur to you that the financial part is just the cost (or even another benefit) of having a great hobby.
There are outstanding buying opportunities from time to time. The trick is recognizing it when it's there in front of you and acting on it. Doing so is very frequently a contrarian move and requires an emotional gut-check.
5-15% of a person's net worth in tangibles is a number I'm very comfortable with. I have this lingering suspicion that many people are up to their eyeballs in coins, neglect a rational plan for retirement, carry debt, and churn their collection over and over frequently, incurring huge transaction costs to fuel what is basically a collecting addiction.
Better carefully vet dealers first. There are plenty of dealers, some quite well known, who will assert that whatever they have in stock is investment quality. I remember what some dealers did to Bear.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
The key to anything in numismatics being an investment is to buy it right. Therefore, know what it's actually worth before purchase. Once you're buried in a coin, you'll have a harder time selling at a fair price. Buy only coins certified by reputable third party grading companies, don't pay buyers premiums whenever possible and keep a list of what you have, when you got it and where and what you paid.
When you're gone your kids/grandkids have a starting point. Finally, you MUST also sell a coin here or there. It's the only way to know if you're doing this right or wrong.
I have met plenty of collectors/investors who bought coins 'right', but lost money or left plenty on the table because they did not sell 'right'. Intelligently getting out is just as important as intelligently getting in.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]