Would a recession increase coin prices or take them down?

Tramp

I wasn't actively collecting back in '87, '97, '01, '08 so I didn't personally experience the effect those economic times may have had on this hobby. How would a recession effect this hobby? Would it tank coin prices or would coin prices go up with more people investing in rare coins which they typically wouldn't?

Any wisdom in our approach in assembling our collections? Buy now, hold off or?

acloco

Down

pruebas

IMHO the prices of all coins would decline.

Collector coins will decline because more folks won't have jobs, or if they do, they will have less disposable income or they will be worried and hoard cash.

Rarities will decline too, not because the rich will be less well off, but because they will be busy buying beaten down securities, high interest bonds, real estate, or other performing assets. Why buy coins when there are so many better investments to be had?

The (relatively) fewer serious collectors who fall in neither of these categories will have some good buying opportunities, just like in the late 90s. And just like then, they probably won't realize it until a decade after it's over.

Cougar1978

Down

Dave99B

Down she goes.

Dave

TomB

Disposable income for the great majority of folks would either decline or essentially stagnate, which would put downward price pressure on virtually all coins that most of us collect.

CoinPhysicist

I'm in the downward camp. It remains to be seen if we actually end up in a recession though.

johnny010

@CoinPhysicist said:
I'm in the downward camp. It remains to be seen if we actually end up in a recession though.

We have been? Economy is definitely in trouble.

Also in the downward camp.

291fifth

Coins may not be hurt as much as some other collectibles.

dhikewhitney

We’re going down
down, down, down
(must be a song there …)

[Deleted User]

Down down down
And the flames went higher
And it burned burned burned
I fell into a burning ring of fire.

Jzyskowski1

ricko

If no one (or very few) are buying, prices will decrease. Sellers need cash too.... Cheers, RickO

Indianlincoln

Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

JerseyB

I want to say down. But 2022 was a pretty awful year from an economic perspective and prices didn't decrease. Smartphones and technology changes everything. Can't really compare today to 08 or any other downturn IMO.

WaterSport

It's a downward event because folks have less disposable income AND because the market gets flooded with collections sold off to pay the bills. I remember a few collectors on this forum who sold in 2010 and they lost a lot of money.

WS

pruebas

@JerseyB said:
I want to say down. But 2022 was a pretty awful year from an economic perspective and prices didn't decrease. Smartphones and technology changes everything. Can't really compare today to 08 or any other downturn IMO.

2022 was probably my best year in numismatics—ever.

If you think 2022 was bad, hold on to your hat.

jmlanzaf

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

Catbert

@WaterSport said:
It's a downward event because folks have less disposable income AND because the market gets flooded with collections sold off to pay the bills. I remember a few collectors on this form who sold in 2010 and they lost a lot of money.

WS

Agree. Numismatics isn’t immune from supply/demand economic fundamentals.

ms71

We've heard from Springsteen and Johnny Cash, so how about a little Janis Joplin:

"Down on Me, Down on Me"

ctf_error_coins

On the last downturn, I became a very aggressive buyer.

[Deleted User]

Down, except for bullion i think. PMs usually rise during a recession.

Overdate

In addition to a possible recession, we also have higher-than-normal inflation. This might offset some of the negative effects on coin prices.

dsessom

I wouldn't be entirely opposed to a downturn in prices across the board right now. I hardly ever sell anything, but acquiring new coins has gotten quite expensive in the past year. A little bit of pull back would be fine with me.

CoinPhysicist

@johnny010 said:

@CoinPhysicist said:
I'm in the downward camp. It remains to be seen if we actually end up in a recession though.

We have been? Economy is definitely in trouble.

Also in the downward camp.

I believe the US is not in an official recession as of now and unless you're named Jerome Powell, you don't really know what is going to happen/if the economy is in trouble. If we end up in a recession, we may still have inflation roaring which would make for some odd circumstances for sure.

Indianlincoln

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

jmlanzaf

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

Higashiyama

@Overdate said: "In addition to a possible recession, we also have higher-than-normal inflation. This might offset some of the negative effects on coin prices."

Yes, I think this is the real wild card. There are multiple reasons for the relatively strong coin prices over the past few years, but certainly a desire to move towards tangible assets is one of them. This could continue in an inflationary recession.

cladking

The future is never really predictable.

However in this specific case the likelihood is for stagflation and this would drive the prices of most physical assets (probably including coins) much higher.

Usually slower economic growth means dropping prices for collectables.

Higashiyama

@cladking said: "The future is never really predictable"

Or, as both Niels Bohr and Yogi Berra observed, "it's tough to make predictions, especially about the future"

Indianlincoln

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

A tiny lose of value, nothing to be scared of

High grade key dates=good investment

coastaljerseyguy

@Atcarroll said:
Down, except for bullion i think. PMs usually rise during a recession.

I think bullion gold will hold its value or go up. One of the big analysts stated there was going to be a commodities super cycle approaching with the coming downturn. Folks want to know there is something to support the price, not a promise of future returns.

cladking

@Higashiyama said:
@cladking said: "The future is never really predictable"

Or, as both Niels Bohr and Yogi Berra observed, "it's tough to make predictions, especially about the future"

Indeed, and as I often say the future is hard to predict because it is "always" dependent on things that haven't happened yet.

People aren't nearly so smart as we think we are.

jmlanzaf

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

A tiny lose of value, nothing to be scared of

High grade key dates=good investment

The question was NOT whether a coin would be worth more in 30 years than today.

Do I have to say it? Before putting "good" in front of investment, compare to the S&P500.

The key coin index was at 5000 in 1979, crossed 30,000 in 2008 and is currently at 35000.

$5000 invested in the S&P500 in March 1979 was worth $115, 600 in March 2008 and would be worth $430,860 today.

So, to whatever extend the PCGS key date index reflects key date prices, if you "invested" $5000 in key date coins in 1979, you cost yourself just under $400,000 in returns.

In fact, if you invested $30,000 in 2008, you have $35,000 today while $30,000 in the S&P in 2008 would be $111,000 today. So ,you actually cost yourself $76,000 with your "key date coin investment" 15 years ago.

Returning to the original question, with the exception of the 1970s, what you see in the chart is that coins do best during periods of economic growth and do poorly during periods of economic recession.

neildrobertson

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Once you adjust for inflation, coins are worth roughly the same they were 20 years ago. The bulk trend in coins for the past couple decades has been for prices to increase more slowly than other more conventional forms of investment.

Can you think of an actual reason why coin prices would go up in a recession? Things don't happen just because.

jkrk

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

A tiny lose of value, nothing to be scared of

High grade key dates=good investment

The question was NOT whether a coin would be worth more in 30 years than today.

Do I have to say it? Before putting "good" in front of investment, compare to the S&P500.

The key coin index was at 5000 in 1979, crossed 30,000 in 2008 and is currently at 35000.

$5000 invested in the S&P500 in March 1979 was worth $115, 600 in March 2008 and would be worth $430,860 today.

So, to whatever extend the PCGS key date index reflects key date prices, if you "invested" $5000 in key date coins in 1979, you cost yourself just under $400,000 in returns.

In fact, if you invested $30,000 in 2008, you have $35,000 today while $30,000 in the S&P in 2008 would be $111,000 today. So ,you actually cost yourself $76,000 with your "key date coin investment" 15 years ago.

Returning to the original question, with the exception of the 1970s, what you see in the chart is that coins do best during periods of economic growth and do poorly during periods of economic recession.

I hate picking random starting points but for reference only... it's memory lane but..

if you bought physical gold in 2008 instead of key coins (I added some gold bought from Tulving that year) the $30k is now valued at $60k. The stk market did better still ... but as to the future... starting from today... IMO the juries still out as I don't have a great deal of conviction.

jmlanzaf

@jkrk said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

A tiny lose of value, nothing to be scared of

High grade key dates=good investment

The question was NOT whether a coin would be worth more in 30 years than today.

Do I have to say it? Before putting "good" in front of investment, compare to the S&P500.

The key coin index was at 5000 in 1979, crossed 30,000 in 2008 and is currently at 35000.

$5000 invested in the S&P500 in March 1979 was worth $115, 600 in March 2008 and would be worth $430,860 today.

So, to whatever extend the PCGS key date index reflects key date prices, if you "invested" $5000 in key date coins in 1979, you cost yourself just under $400,000 in returns.

In fact, if you invested $30,000 in 2008, you have $35,000 today while $30,000 in the S&P in 2008 would be $111,000 today. So ,you actually cost yourself $76,000 with your "key date coin investment" 15 years ago.

Returning to the original question, with the exception of the 1970s, what you see in the chart is that coins do best during periods of economic growth and do poorly during periods of economic recession.

I hate picking random starting points but for reference only... it's memory lane but..

if you bought physical gold in 2008 instead of key coins (I added some gold bought from Tulving that year) the $30k is now valued at $60k. The stk market did better still ... but as to the future... starting from today... IMO the juries still out as I don't have a great deal of conviction.

As the saying goes, past results are not indicative of future results. Lol

Personally, I think you are always more or less limited by economic growth. And even in a purely inflationary environment, there's no reason that the stock market wouldn't inflate at least as much as gold.

Stagflation is harder to predict the effects, I think. It could be the worst of both worlds. But that's why diversification matters. You don't have to have all of your assets performing equally at all times.

cladking

@jmlanzaf said:

>

Stagflation is harder to predict the effects, I think. It could be the worst of both worlds. But that's why diversification matters. You don't have to have all of your assets performing equally at all times.

I(f we get stagflation it will be different this time. I would expect higher levels of inflation with much of it showing up right on the bottom line for some corporations. The stock market might be expected to hold up better than usual making it more attractive to anywhere else you can lose your money.

The Fed is extremely limited in how high they can raise interest rates. with the huge money printing the last 40 years there could be quite a significant change in the value of the dollar and many things can change their relative values. Inflation is always harmful to an economy because it harms good business decisions almost as much as bad ones. Good companies are destroyed and some bad ones are propped up.

Indianlincoln

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

A tiny lose of value, nothing to be scared of

High grade key dates=good investment

The question was NOT whether a coin would be worth more in 30 years than today.

Do I have to say it? Before putting "good" in front of investment, compare to the S&P500.

The key coin index was at 5000 in 1979, crossed 30,000 in 2008 and is currently at 35000.

$5000 invested in the S&P500 in March 1979 was worth $115, 600 in March 2008 and would be worth $430,860 today.

So, to whatever extend the PCGS key date index reflects key date prices, if you "invested" $5000 in key date coins in 1979, you cost yourself just under $400,000 in returns.

In fact, if you invested $30,000 in 2008, you have $35,000 today while $30,000 in the S&P in 2008 would be $111,000 today. So ,you actually cost yourself $76,000 with your "key date coin investment" 15 years ago.

Returning to the original question, with the exception of the 1970s, what you see in the chart is that coins do best during periods of economic growth and do poorly during periods of economic recession.

Maybe you just don’t make good investments on coins? And making a good return doesn’t always involve what a pcgs 3000 graph says

Generally maybe coins are selling for less during recession. The masses are buying less and saving their money more

Sometimes recessions don’t hit some people like they do others

I have confidence in the investments I make and I don’t lose

jkrk

I believe your points are spot on correct.

Inflationary environment (accompanied by rising rates) hurts all asset classes. Stagflation, no quarrel with your view.
The gold play in my view is also based on whether we will see a rising block countering the US/west monetary system. After many false starts, has the West printed more money, creating more debt, than they ultimately can handle? Each crisis seems to need a bigger debt load than the previous crisis. I believe, Central banks are the key to golds performance and whether they ultimately back a portion of their currencies with gold? They seem to be the major players , so I am currently betting with them (diversifation only).

The last time the gold/stock ratio closed , in a major way, was during the inflationary 70's. Will history repeat? Unfortunately the sample size is too small.

https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart

jmlanzaf

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:

@jmlanzaf said:

@Indianlincoln said:
Who knows maybe prices will stay the same or increase

I’m a firm believer that certain coins will always perform

Do you think, for example, an 09svdb in 65 rd would sell for half the price of current day value? Stocks sell for half off all the time, not coins

High grade keys dates aren’t going anywhere

Why half?

Even premium coins have eroded in value during market downturns.

That seems like an upward trend to me

Look at the recession periods, which was the question

A tiny lose of value, nothing to be scared of

High grade key dates=good investment

The question was NOT whether a coin would be worth more in 30 years than today.

Do I have to say it? Before putting "good" in front of investment, compare to the S&P500.

The key coin index was at 5000 in 1979, crossed 30,000 in 2008 and is currently at 35000.

$5000 invested in the S&P500 in March 1979 was worth $115, 600 in March 2008 and would be worth $430,860 today.

So, to whatever extend the PCGS key date index reflects key date prices, if you "invested" $5000 in key date coins in 1979, you cost yourself just under $400,000 in returns.

In fact, if you invested $30,000 in 2008, you have $35,000 today while $30,000 in the S&P in 2008 would be $111,000 today. So ,you actually cost yourself $76,000 with your "key date coin investment" 15 years ago.

Returning to the original question, with the exception of the 1970s, what you see in the chart is that coins do best during periods of economic growth and do poorly during periods of economic recession.

Maybe you just don’t make good investments on coins? And making a good return doesn’t always involve what a pcgs 3000 graph says

Generally maybe coins are selling for less during recession. The masses are buying less and saving their money more

Sometimes recessions don’t hit some people like they do others

I have confidence in the investments I make and I don’t lose

Always consider opportunity costs.

You can cherry pick data if you want. The question was broad based and so is my answer.

I once bought a 3-legged Buffalo for 50 cents and sold it for $600. Extrapolating that result to a general market indicator would be silly.

Elmhurst

Gold went from I think 1000 to 800 in 08, so collectors dumped their numismatics to buy bullion at a discount.

neildrobertson

@Indianlincoln said:

I have confidence in the investments I make and I don’t lose

Everyone loses. Even the best investors. Saying you don't just makes you look dishonest.

jmlanzaf

@neildrobertson said:

@Indianlincoln said:

I have confidence in the investments I make and I don’t lose

Everyone loses. Even the best investors. Saying you don't just makes you look dishonest.

I knew a dealer who never "lost" on a coin. She refused. No matter how long it took. She bought a proof Trade Dollar for $2200 in 1989 or 1990, right before the coin crash. She finally sold it in 2003... for $2200. So, technicality she never"lost", until you consider the opportunity costs.

Indianlincoln

@jmlanzaf said:

@neildrobertson said:

@Indianlincoln said:

I have confidence in the investments I make and I don’t lose

Everyone loses. Even the best investors. Saying you don't just makes you look dishonest.

I knew a dealer who never "lost" on a coin. She refused. No matter how long it took. She bought a proof Trade Dollar for $2200 in 1989 or 1990, right before the coin crash. She finally sold it in 2003... for $2200. So, technicality she never"lost", until you consider the opportunity costs.

That’s basically my thinking

The 3 legged buffalo example is more like winning a scratch off than an investment

jkrk

I take losses almost everyday. They are usually losses in stocks. In all candor, I always have paired positions so 1 side is almost assuredly a loser. As an investor, I rank in the 100 worst. No one has written a book about worse than horrible investors, as of yet, but I'm sure to maintain a prominent place. I've been trading my account for almost 40 years and almost all my investments are losers. My wife believes I should give up investing but I don't give up that easily. In truth, I invest very little. Mainly when I want to be punished. In the last couples of years my biggest stock investments have been in Emerging markets including and excluding China. Can I have a do over? My Trading is far different. I have never had a losing year and very rarely have a losing month. Trading is how I survived so I'm not complaining. I never hit more than singles so I truly understand risk management to a fault. Maybe too well? I cut my losses and gains very quickly. I am extremely disciplined. My wife said, I don't have to retire from that business.

This is a long winded confession that own a 1841-H half dime, bought 8 years ago and I'm still trying to reach a breakeven. I'm not going to take a loss. LOL. Maybe during the next bull market I go finally go green? Do half dimes tarnish?

jmlanzaf

@Indianlincoln said:

@jmlanzaf said:

@neildrobertson said:

@Indianlincoln said:

I have confidence in the investments I make and I don’t lose

Everyone loses. Even the best investors. Saying you don't just makes you look dishonest.

I knew a dealer who never "lost" on a coin. She refused. No matter how long it took. She bought a proof Trade Dollar for $2200 in 1989 or 1990, right before the coin crash. She finally sold it in 2003... for $2200. So, technicality she never"lost", until you consider the opportunity costs.

That’s basically my thinking

The 3 legged buffalo example is more like winning a scratch off than an investment

Except if you hold a coin for 10 years and make 25% on it, you really lost money.

jmlanzaf

@jkrk said:
I take losses almost everyday. They are usually losses in stocks. In all candor, I always have paired positions so 1 side is almost assuredly a loser. As an investor, I rank in the 100 worst. No one has written a book about worse than horrible investors, as of yet, but I'm sure to maintain a prominent place. I've been trading my account for almost 40 years and almost all my investments are losers. My wife believes I should give up investing but I don't give up that easily. In truth, I invest very little. Mainly when I want to be punished. In the last couples of years my biggest stock investments have been in Emerging markets including and excluding China. Can I have a do over? My Trading is far different. I have never had a losing year and very rarely have a losing month. Trading is how I survived so I'm not complaining. I never hit more than singles so I truly understand risk management to a fault. Maybe too well? I cut my losses and gains very quickly. I am extremely disciplined. My wife said, I don't have to retire from that business.

This is a long winded confession that own a 1841-H half dime, bought 8 years ago and I'm still trying to reach a breakeven. I'm not going to take a loss. LOL. Maybe during the next bull market I go finally go green? Do half dimes tarnish?

Lol. I hear you. I feel your pain.

opportunity

@jkrk said:
I take losses almost everyday. They are usually losses in stocks. In all candor, I always have paired positions so 1 side is almost assuredly a loser. As an investor, I rank in the 100 worst. No one has written a book about worse than horrible investors, as of yet, but I'm sure to maintain a prominent place. I've been trading my account for almost 40 years and almost all my investments are losers. My wife believes I should give up investing but I don't give up that easily. In truth, I invest very little. Mainly when I want to be punished. In the last couples of years my biggest stock investments have been in Emerging markets including and excluding China. Can I have a do over? My Trading is far different. I have never had a losing year and very rarely have a losing month. Trading is how I survived so I'm not complaining. I never hit more than singles so I truly understand risk management to a fault. Maybe too well? I cut my losses and gains very quickly. I am extremely disciplined. My wife said, I don't have to retire from that business.

This is a long winded confession that own a 1841-H half dime, bought 8 years ago and I'm still trying to reach a breakeven. I'm not going to take a loss. LOL. Maybe during the next bull market I go finally go green? Do half dimes tarnish?

It sounds like you've been placing too many "wall street bets"...