What is the best way to invest in coins?
relayer
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If you were to only buy coins purely as an investment (not because you liked them or for a collection) - only for the best return on your money in 5 years, how would you invest $10,000 today?
And how would you invest $100,000?
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The emphasis would be on high grade stuff.Its always been the most soothafter coins anyway,so that
really goes without saying.
Next,if not first,would be rarites.As in the key-dates.
Some will laugh but,State Quarters are still pretty hot and look to stay that way for about the next 10 years maybe.Heck,People are buying and selling these like hot-cakes and making good money all the way.
You might could do that too,if you can get halfway aggressive with a marketing campain,and do alot of networking,as I,ve witnessed others do also.
Heck,I,m about to talk myself into this `million dollar idea`now.
Spend the 100k on the MS66 1856 FE and an extra value meal.
I also want to add...I,ve heard too,that if you want to make a small fortune in coins,first...you start with a larger fortune.....
Assuming you could sell the graded coins for $2000, and sell all of the rolls, your net would be $15,930 ($35 per roll) on the low side, and $17,920 ($40 per roll) on the up side.
and it sets us apart from practitioners and consultants. Gregor
The best way to invest in coins "purely as an investment (not because you liked them or for your collection" as you put it, is not to do it. Why "invest" in them if it is not at least partially for the enjoyment? None of us knows how prices will move and history has shown that coin values can be highly volatile.
If you do choose to invest, I'd recommend: 1) staying away from fads and coins that are hot right now; 2) don't spend all of you rmoney on one coin or one group of coins - diversify; 3) be as careful about what you pay as you are about what you purchase - if you pay 10% more from one source than you could have bought the same coin for elsewhere, you're starting an extra 10% in the hole: 4) plan on holding the coins at least 3 years; 5) don't spend more than roughly 10% to 15% of your investment funds on rare coins; 6) don't "invest" money that you can't afford to lose; 7) buy something than you know a lot about (or learn about it of you don't already) and that you can appreciate.
I'd consider MS65 and MS66 (pre 1950) silver commemoratives and scarcer and/or or higher grade MS silver and copper type coins, among others. And, place the emphasis on both quality and eye appeal.
I realize that my response will not necessarily be popular with you, other forum members or dealers but that is my honest opinion
Personally, I make money in coins by using the following accounting trick:
For each $ 100, assume that $ 25 is an entertainment expense -- I would have spent that in some other way, and wouldn't have expected any return other than the entertainment and educational value.
Then, my investment principal is $ 75, and I'm happy to measure the return against the $ 75 starting point!
So, successful coin investing is much more like "work" than "investing". Which is why I'd recommend that you focus on the hobby first so you enjoy your work. Then apply Higashiyama's trick and a bunch of luck and it might work out ok.
That said, if you were to speculate in coins, one approach would be to look for low-labor "generic" items that have the potential for significant appreciation.
I think the best candidate for that is new-issue coins from the US Mint. Buy $10,000 or $100,000 of a carefully selected new issue, leave them in sealed shipping boxes, and sell them to a wholesaler when demand appreciates.
That would have worked out very nicely with 1999 Silver Proof sets, for example. Unfortunately, for that one winner there's about 99 losers
The main reason coins make lousy "investments" is that you'll probably be buying at retail and selling at wholesale. Depending on what coins you buy, you very well could only get 50% of your purchase price if you sold them the day after you bought them. Therefore, the retail price of the coin would have to DOUBLE before you made one cent in profit!
So, unless you invest the time to become very well educated about coins and learn to buy them at the lowest possible prices, you're just a sheep waiting to be sheared.
In addition, coins are like any other antique or piece of art - they go in and out of fashion. So, Morgan dollars could be fashionable today and bring high prices, but no one knows whether they'll still be fashionable or bring higher prices in ten or 20 years. Prices for many coins were much higher in 1989 than they are today!
So, the short answer is: If you just want to "invest" in coins, lie down until the feeling passes!
Check out the Southern Gold Society
Tyler
Those are all great answers. I think coinguy1 gave the best investment advice, but DHeath and Supercoin spoke the truth.
Investing counts on the hope that somebody dumber than you will come along and pay you more than what you bought it for.
To make money in coins requires both work and skill. So someone who invests is at a serious disadvantage against people with talent who put in the effort.
If there is $X in profit across the market due to supply and demand, the largest percentage will go to the people who are the best at it.
More than likely that profit would come from the people who are investing.
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