What coins will hold their value in a downturn?
roadrunner
Posts: 28,303 ✭✭✭✭✭
Most every popular series is quite a bit up over the past 12 years. Many type coins too as well as bulk items like wheat cents. There won't be many areas left unpromoted in this current market. But what items do you think will hold up after their promotion or will finally stir a bit as things start to subside:
Some thoughts might be super key type coins like 1796-97 halves,
1794 halves, 1799 cents, chain cents, major rarities like a 1913 nickel, etc. I think that some post 1880 key dates have been so pushed that they have no choice but to correct heavily in the upcoming years....imo. Individual key dates that I do like would include 1804 and 1874-cc dimes and 1878-s halves for example.
What items do you think will sidestep the hype and hoopla and continue to hold value for the next 10 years? Or is such a thing impossible? And I realize NO ONE here cares one iota about the price of their coins because we collect only for the fun of it. But just for discussion what would your choices be?
roadrunner
Some thoughts might be super key type coins like 1796-97 halves,
1794 halves, 1799 cents, chain cents, major rarities like a 1913 nickel, etc. I think that some post 1880 key dates have been so pushed that they have no choice but to correct heavily in the upcoming years....imo. Individual key dates that I do like would include 1804 and 1874-cc dimes and 1878-s halves for example.
What items do you think will sidestep the hype and hoopla and continue to hold value for the next 10 years? Or is such a thing impossible? And I realize NO ONE here cares one iota about the price of their coins because we collect only for the fun of it. But just for discussion what would your choices be?
roadrunner
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Comments
<< <i>What coins will hold their value in a downturn? >>
All coins that are worth only face value.
Russ, NCNE
If we all could really know what coins will hold their value in a downturn?
2. The really nice ones
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain
Newmismatist
-----key dates within any popularly collected series such as Walkers, Buffalos, Mercs, etc.
-----truly rare coins, not just top pop grade rarities or highest grade for a particular issue.
-----spectacularly toned coins. not necessarily the vibrant toners like the standard rainbow Morgans that seem to have come out of the woodwork lately, but more concentrically toned gems with booming luster.
-----commemorative gold.
al h.
Just what retains its liquidity can vary depending on which economic group is most affected by the various types of downturns. Currently, the middle class is the most vulnerable because the "new aristocracy" of George the Worst is firmly in charge. Good jobs are leaving the country and many of the "newly created" jobs that we hear so much about are poor paying and have no benefits. If George the Worst remains in power then the coins collected by the middle class are likely to decline in liquidity as the market becomes flooded with people trying to "dump" mid-range coins which the "market" is no longer going to want. Because this is a fairly broadly based market the declines here will tend to be more gradual. It may take a long time for pricing guides to catch up with market (liquidity) changes.
Should there be a change in administration after the next election there could well be a decline in the fortunes of the "new aristocracy". This would lead to a downturn in the very top of the coin market since these people are the ones that have fueled the current run-up in ultra-grade material. If this happens it is the liquidity of the very high-end coins that will be affected. Because the high-end of the market is quite thin the departure of just a few of the "players" can have a very unsettling effect on the market in a very short period of time. Price and liquidity changes in this arena can be quite sudden and violent. Some "players" in this markert are pure investors and will dump their holdings quickly when it looks like the value gains they had been counting on are not going to materialize.
What coins will hold their value in a downturn? It depends on what group of collectors is most affected by the downturn.
I have fear for even collector coins as dealers themselves have gotten deeply involved in pushing up the prices of key dates and monster toned coins. Dealers are usually collectors, investors, and speculators too. They are just as likely to put away a group of one key coin/dates if they see a run coming. I just don't buy that the price increases for 1877 Indians, 1932-s washies, or 1893-s dollars is just from collector's desires. The dealers have had a hand in pushing up the prices so they can profit at this too. I would bet that dealers hold as many MS63 and up 32d quarters as do all the collectors. Some tried and true collector coins WILL get hurt down the road, the question is which ones have been promoted and manipulated less.
Maybe XF gold type coins ($3 Indian, $5 Libs for examples) will be very stable down the road. I do not believe that Indian cents or buffaloes in good condition will be unaffected either. Even these have been manipulated to some extent. 1964 proof sets or very common BU rolls might be another area that has little downside (or upside for that matter).
roadrunner
My picks: Colonials (except the British tokens collected with the series), early copper, and all circulated US coins except bust dollars and gold.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>291fifth - I don't understand why liquidity is relevant. High end MS and PR gold type coins are always very liquid, yet they have substantial downside in a downturn.
My picks: Colonials (except the British tokens collected with the series), early copper, and all circulated US coins except bust dollars and gold. >>
I'd say "Liquid at a loss". Liquidity is everything in collectibles. If you have any experience in other collectible areas you realize quickly how nice it is to be involved in coins...which are the most liquid collectibles, in my opinion.
I see many of the dates being mentioned on this forum and how difficult they are to find currently, many of these are becuase of the current demand from all of the above, but in actuality there not scarce, nor are they rare. Take a look at the population reports of those coins and see how many are actually accounted for. More importantly look at the dates that readily come availble vs the ones you never see! IMO, this is where you can begin to determine which key dates will hold out and which ones may suffer from a downturn sell off!
jim
<< <i>Currently, the middle class is the most vulnerable because the "new aristocracy" of George the Worst is firmly in charge. Good jobs are leaving the country and many of the "newly created" jobs that we hear so much about are poor paying and have no benefits. If George the Worst remains in power then the coins collected by the middle class are likely to decline in liquidity as the market becomes flooded with people trying to "dump" mid-range coins which the "market" is no longer going to want. >>
I just love it when something as esoteric as a coin collecting forum becomes politicized with remarks like this. The quantum leap from coin liquidity to the junk economics in this post defies logic and common sense. Supply and demand drives and fuels any collectible market.
"Good jobs" have been leaving this country for the last number of years, and yes, even during the previous administration. You have also conveniently left out the millions of new jobs created by people that left the job market and started their own businesses. Greenspan even admitted the other day during his testimony that they can only do an estimate on that. This country has been converting from a manufacturing to a service society for years. Bush had nothing to do with that.
So if the President is reelected, we will see middle class collectors dumping their coins en masse due to Bush's "control" of coin liquidity? Your agenda is extremely transparent, and would be better served on a Bush-bashing forum somewhere else. I am not part of any Aristocracy nor do I plan to dump my coins after the election. If you do, I may be able to pick up some bargains. Assuming, of course, you have liquid coins.
Bob
Vietnam Vet 1968-1969
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Liberty: Parent of Science & Industry
1) Any wild toning coins.
2) Very high mintage med. grade coins.
3) Moderns.
<< <i>I think among US coins, all pre-1853 coins are pretty darned scarce in Fine and better, and their demand is primarily collector vs investor driven. Even more true of pre-1836 coins. Even more true of pre-1816 coins. Even more true of pre-1808 coins. Even more true of pre- 1798 coins.
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Well, here's my opinion on what NOT to hold onto (in order) when we see prices start to come down....
1) Any wild toning coins.
2) Very high mintage med. grade coins.
3) Moderns. >>
Peaceman certainly has it right. I had some nice "toners" for sale at a local show last Sunday. Absolutely no interest. Thin, specialized markets such as "toners" are very dangerous.
figure out what the common denominator is for such coins, & you have your answer.
K S
<< <i>Well, here's my opinion on what NOT to hold onto (in order) when we see prices start to come down....
1) Any wild toning coins.
2) Very high mintage med. grade coins.
3) Moderns. >>
Peaceman: OK. You say "any wild toning coins". I suppose this means that if the market
turns down you expect any wildly toned coin to lose value. Disregarding the fact that many
find such coins attractive doesn't it seem possible that there are some wildly toned coins
that have no substantial premium because the toning is less than attractive or the coin has
some other major defect? Do you really believe "any wild toning coin" should be sold by col-
lectors whether it's part of their collection or not. -Whether there's a sustantial premium on it
or not?
How about "very high mintage med. grade coins"? This may seem reasonable at first blush as
a category of coin to avoid if profit is your primary goal, but you're painting with one mighty
broad brush here. This would include some pretty scarce classic in some pretty popular series
as well as some very rare moderns in series which are exploding in popularity. In either
case it might not be such good advice to suggest that investors dispose of such coins. By the
same token a collector might be making a huge mistake to let go of such coins.
And finally you suggest "moderns" should not be held if prices start to come down. Are you refer-
ring to Ikes? Clad circulation issues? Mint sets? Proof sets? Commem gold? Commem silver?
Silver proofs? States coins? Silver states coins? Commem clad? Silver Kennedys, Clad Kennedys?
Memorial cents (copper)?, Memorial cents (zinc)?, Circulating varieties?, Mint or proof set varieties?,
Mules?, Modern bullion?, Proof bullion, Modern mint medals, Or perhaps pocket change?
Or perhaps you'd rather believe that coins you don't know anything about and are increasing in
value will eventually turn on those who find them a lot of fun to collect?
<< <i>What items do you think will sidestep the hype and hoopla and continue to hold value for the next 10 years?
-----key dates within any popularly collected series such as Walkers, Buffalos, Mercs, etc.
-----truly rare coins, not just top pop grade rarities or highest grade for a particular issue.
-----spectacularly toned coins. not necessarily the vibrant toners like the standard rainbow Morgans that seem to have come out of the woodwork lately, but more concentrically toned gems with booming luster.
-----commemorative gold.
al h.
<< <i>Clad. Usually what goes up the fastest.... comes down the fastest.... I chose the rainbow market for that reason.... I don't think I said I liked or disliked them..... When the rainbow market starts coming down.... all of the "traders" "speculators" and "investors" are going to dump everything they have and move on to the next sector. I think the high mintage midgrade coins will hurt from this as collectors will begin to see the downturn and people will get on the bandwagon to sell.... my opinion is that this particular type of coin will come down as it's most likely gone up over the last year as part of the residual rise in the market. As far as moderns, I just think the people who own a pop 1 of 1 coin that's 2 years old are going to find out that they won't be able to dump it during the downtrend for anywhere close to what they paied for it and there are many more years to come to make it a 100/ 1000 pop coin...... >>
I tend to agree with this sentiment and don't necessarily disagree with any of your examples.
Camelot
Registry 1909-1958 Proof Lincolns
Look at the 1928 Peace $.Tell me when you ever saw it drop in price.
Registry 1909-1958 Proof Lincolns
to reach higher highes. Garbage goes down and tends to stay there forever. The garbage is governed by
hype, manipulated markets, greed, averice, stupidity and ignorance. These constitute major and
powerful forces, that can move normally sane people to make some insane investments.
Quality is generally composed of true rarity that has stood the test of time.
-Quality, coins that were superb gems 50-100 years ago and are superb gems today.
-Key coins, that are truly rare and have maintained a stable number available over a lengthy period.
-Toning of great beauty ,may retain potential, but only if attached to a coin of exceptional condition or rarity or both.
Modern coins may very well become the quality coins of tomorrow. However, there is more risk involved and they
may not be a sure thing in all coin series. Only time will tell. Accummulators of today, at high prices
, may be showing forsight or
may end up on the short end of the stick.
Camelot
Camelot
Like the 1998 Kennedy matte half and the 1995 W proof silver eagle...which I do not have and wish I did...but maybe when the market falls it will too...then you have the 1999 Silver sets...they are good but the price has risen and is rising even more. I am going to do some more concentration in these areas as sometimes you just can not get enough of a good thing. Just watch the mintage numbers and you should be fine.
K S
"Seu cabra da peste,
"Sou Mangueira......."
I believe many key date coins will be hammered in the next downturn. This market has seen some heavy manipulations. We have not created a new paradighm nor cold fusion. Everything still is the same. Same laws of economics and free (I mean manipulated)
markets. What has gone up will likely come down. I do like 1796-97 halves however but at the current rate of appreciation, even these may get a correction eventually. Tread carefully my friends.
Susies may be the answer however losing 25% per year on the US dollar is not my idea of holding value. Neither is any US coin or stamp worth face value.
roadrunner
I don't agree with early gold seeing any downturns except for perhaps some of the "upgrades" and stratospheric grade coins which may or may not have the wow appeal other than what the plastic would suggest. Wholesome original earlies are scarce to rare and although have increased in value, in my opinion are a real value in the market with an increasing collector and investor base to support prices well into the future.
Although even some of those coins are finding very deep pocketed customers who have no intention of selling anytime soon. I have 6 of the 1834 capped bust quarter eagles placed as a case in point and I have tried a few times to determine whether my customers would like to sell them and that discussion usually ends up with " what do you have to offer me". They are off the market indefinitely.
Rgrds
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>after 30 years in coins, i've observed that certain coins never go down in value, no matter what. examples: 1901-s quarter, 1797 half-$, 1802 half-dime, chain cents, 1871,2,3,4 -cc dimes, 1885 3-cent nickel, 1796 half-cent, 1920-s indian $10 gold.
figure out what the common denominator is for such coins, & you have your answer.
K S >>
I agree and add to the list 1793 half-cent, 1794 dollar, 1796 quarter, CC Seated Liberty dollars, 1895-o dimes, 1896-S and 1913-S quarters, and a few others that every collector wants but can't afford. These coins are rare enough to never be promoted.
The fact that this thread is so popular makes me wonder whether to bubble of the current bull market in US coins has burst already.
This is right on the money, In fact it is my belief that many keys are currently near their tops and will come down if any change happens in the market. One of the largest Bust halve dealers in the country currently has a 1797 Bust half for sale in VF at $39,500. Only another dealer with a wealthy customer, or very wealthy collector will be able to purchase this coin. Wealthy collectors that buy these kinds of coins have a much different attitude about their collections than the general hobbyists. To a much greater degree they look at the investments potential of their coins. Many of the very wealthy collectors I know have stop buying, even those with registry sets. They are looking for real bargains or are shifting into hedge coins that have a double edged potential benefit like common date slabbed MS gold saints. A market down turn is caused by to many sellers and not enough buyers, that has not happened yet. There is however one step just before that and that is the hold period. Many of the wealthy collectors are going into the mode. They cannot see the investment upside of paying $39,500 for even a key. The question always enters their minds “ who will buy this next and at what price? “ Many wealthy people have a common favorite saying “don’t fall in love with your deal” This is the reverse of a regular hobbyist who is in love with his deal, on the other hand he does not have so much at stake. Super rare coins, the 1804-dollar, may always keep going but that is a different game than collecting keys. I think that many keys will begin to level off as wealthy investors/collectors go into the HOLD pattern and take a wait and see attitude. They will move out of HOLD in either direction depending on the World economic news. If Inflation starts being reported they will start buying again, if it looks like deflation they will start dumping.
<< <i>Wealthy collectors that buy these kinds of coins have a much different attitude about their collections than the general hobbyists. To a much greater degree they look at the investments potential of their coins. >>
totally disagree w/ that statement. if someone is already wealthy, why would they choose such a iffy & esoteric segment as COINS for investment potential? why not stocks? bonds? real-estate? on the contrary, i think those who have plenty of dough are in fact willing to stretch for coins, because they are NOT concerned about the investment potential.
example, i seriously doubt (though i don't know) that eliasberg saw his coins as a financial investment. ditto garrett, or bass.
another example would be famous athletes who have assembled nice coin collections, again, it's difficult for me to believe they were "financially investing" in rare coins, when their bread & butter is baseball, football, whatever.
<< <i>They cannot see the investment upside of paying $39,500 for even a key. The question always enters their minds “ who will buy this next and at what price? “ >>
again, i just don't believe that. it's true that a dealer that props up a 1797 half in his corner coin shop is not going to have many casual buyers sauntering in, loaded w/ cash to buy such a coin. but all your dealer needs to do is plop that coin in a major auction, & it is about as guaranteed as anything can be that he will make $$$ on that coin.
no way, NO WAY do you lose $ on a draped bust small eagle half, no way. i myself own 1, & i'd wager that on the open market, i would make 4 times my original investment back today, & my coins a p.o.s!
K S
So in your opinion wealthy people just put their money in what ever they like without thought to their investment right? Well it is very hard to get wealthy in the first place if you do that.
Wealthy investors move their money to what ever will make them money at the time. They buy what is hot and sell when it is not.
It is pretty easy to see what has been hot the last few years.
Take the value of the overall stock market, the bond market, the interest market over the last few years and compare those markets to the coin market, the Gold market, and the Silver market and tell me which has made investors the most return on their capitol?
Gee that should be an easy one!
“again, i just don't believe that. it's true that a dealer that props up a 1797 half in his corner coin shop”
I did not say that, I said one of the LARGEST dealers in the country.
“no way, NO WAY do you lose $ on a draped bust small eagle half, no way. i myself own 1, & i'd wager that on the open market, i would make 4 times my original investment back today, & my coins a p.o.s!”
Man have the dealers done a good job on you! So it is your opinion that if someone buys this $39,500
VF Bust, then sometime in the next few years this coin will be worth $158,000? Please!
“example, i seriously doubt (though i don't know) that eliasberg saw his coins as a financial investment. ditto garrett, or bass.”
For every muti-millionair that dies before he goes broke, and his relatives sell his coins, there are just as many that go broke before they die and sell the coins themselves, lets start with the Hunts. You don’t think these people have their collections on their financial statements right along with their real-estate ,and stocks? You don’t think they get appraisals and borrow money on these collections?
I interviewed for an 100+ year old optics company in Pittsburgh yesterday that was purchased 8 years ago by a very wealth individual. He does not want the company to post a profit at the end of the year. If it did, then he makes income and has to pay taxes on it. However, if he reinvests all excess money back into the company, the company "ie his investment" becomes worth more both on paper and in reality, so he becomes worth more. Until he sells the company, he does not have to worry about paying capital gains taxes, but yet he becomes more rich. I am sure that if he needed a large sum of money, he could borrow against his company and write of the interest on his taxes.
Rich people do not become rich by being frivolous with their money. Rich inheritors become poor by being frivolous with the money that their ancestors worked very hard to gain. Athletes and entertainers who have riches thrust upon them by celebrity success become poor by being frivolous with money. So do many lotto winners.
I am sure that even Donald Trump does not keep millions of dollars in a bank account doing nothing. His fortune is in assets.
I do not understand many of the things that self-made rich people do.
<< <i>So in your opinion wealthy people just put their money in what ever they like without thought to their investment right? Well it is very hard to get wealthy in the first place if you do that. >>
my point is, i find it very hard to believe that someone looking to increase wealth would choose coins as a primary vehicle. much more likely they would choose coins as a primary vehicle to increase "recreational enjoyment"
believe me, there are very, very few people out there who became wealthy (or wealthier) investing in coins. ok, q david bowers might be 1.
<< <i>Wealthy investors move their money to what ever will make them money at the time. They buy what is hot and sell when it is not. >>
i absolutely, totally, completely disagree w/ that statement.
example, suppose you bought apple computer stock when it was "hot", where would you be now? what if you bought dot-com stock when it was "hot", where would you be now? what if you bought silver in 1980 when it was "hot", where would you be now? on the contrary, wealthy investors put there money where the market is NOT hot, & hope the market WILL BECOME "hot". that's how you make $$$, not by buying at the peak of a market. you are GUARANTEED to lose in the long-term if you consistently buy what's "hot".
<< <i>“again, i just don't believe that. it's true that a dealer that props up a 1797 half in his corner coin shop”
I did not say that, I said one of the LARGEST dealers in the country. >>
it doesn't matter. rarcoa in downtown chicago doesn't just have a bunch of rich guys walking in from time to time looking to drop $40,000, nor does stack's, etc. the reason to have such a coin in stock is ADVERTISEMENT. the financial gain from putting such a coin in your shop is peripheral.
<< <i>“no way, NO WAY do you lose $ on a draped bust small eagle half, no way. i myself own 1, & i'd wager that on the open market, i would make 4 times my original investment back today, & my coins a p.o.s!”
Man have the dealers done a good job on you! So it is your opinion that if someone buys this $39,500
VF Bust, then sometime in the next few years this coin will be worth $158,000? Please! >>
never said that, what i said is that you WILL NOT LOSE MONEY on a small-eagle draped bust half. didn't say anything about turning 39500 into 158000. now, MY example has quadrupled (imo), but i'm just saying that at the least, you WILL NOT LOSE buying such a coin.
They brown bagged not only their lunches but their hot beverages too! In their thermos bottle. They were very careful in spending money when they were not travelling. They felt that they needed to leave their children something they were proud of and a momento of their times together. They also felt it was important to use their minds, enjoy collecting and most of all they felt a sense of time travel in which they could hold a coin and imagine being in that time period. They truly enjoyed sharing their experiences but were quite shy and reserved otherwise.
Yes coins were an investment. It was an investment of their learning, pride of ownership, saving history and last but certainly not least, financial.
When collecting coins, the biggest concern was to invest wisely in coins so that they DON'T lose what they have paid for the coin(s). But if there was any concern about that then the coin was not going to be purchased.
I remember Emory Norweb admonishing me for buying lunch when I could have brown bagged the lunch especially when I had a meal plan already paid for in College. I remember her example:
Every lunch you brown bag is $1 towards your coin collection (prices back then).........what could you buy with $365 extra a year?
That hit me and I became a real student!
Every lunch you brown bag is $1 towards your coin collection (prices back then).........what could you buy with $365 extra a year?
That hit me and I became a real student! >>
Yes yes a wonderful foundational building experience to be sure.
Ahhhh to only know then what we know now
Rgrds
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Collectively we tend to be very similar whether you're talking pastry chefs or Asians
living in South America. Wealty people have as many different reasons to spend their money
as the rest of us. They simply have a lot more money. A coin that's out of my reach may
represent little more than pocket change to these folks. They generally will look for diver-
sion and hope for profits in this hobby the same as the proletariat.
There's something in coins that can appeal to all people and the market allows people
to participate on many different levels.