Which coins would you buy? (changed from: My "investing" dilemma)
UncleJoe
Posts: 2,551 ✭✭✭
I was discussing with my wife that due to the run-up in the price of silver, I was thinking about selling some of "my" silver coins to finance additional coins for "my" eclectic 18th century US date/type set. However, while I have a lot of common silver, most of it is part of "collections" and/or sets and the bottom line is that I don't really want to part with very much. When I expressed this to my wife she said, "Then don't sell any of the silver and just buy what you want". 
(I knew there was a reason why we will have been married for 34 years next month 
)
Apart from the silver, I have an "extra" $5,000 that I intended placing into a 5-year CD (all my other investing bases are covered) but with interest rates as low as they are I would wind up with a net gain of about $600 after 5 years. As an experiment, I am going to buy coins with the $5,000 with the goal of being able to net better than $600 after 5 years.
I think that just about any coin(s) that I buy for my 18th century US set should be able to meet that goal. I also thought about a 55/55 and others. Anyone have any other ideas and/or suggestions?
Joe.
Edit: Based on initial replies I want to clarify that I am looking for coin suggestions that might meet the goal above and not "investing" advice. As I wrote above, all my investing needs are covered. This is just a $5,000 experiment. Thanks. Joe.
(I knew there was a reason why we will have been married for 34 years next month )Apart from the silver, I have an "extra" $5,000 that I intended placing into a 5-year CD (all my other investing bases are covered) but with interest rates as low as they are I would wind up with a net gain of about $600 after 5 years. As an experiment, I am going to buy coins with the $5,000 with the goal of being able to net better than $600 after 5 years.
I think that just about any coin(s) that I buy for my 18th century US set should be able to meet that goal. I also thought about a 55/55 and others. Anyone have any other ideas and/or suggestions?
Joe.
Edit: Based on initial replies I want to clarify that I am looking for coin suggestions that might meet the goal above and not "investing" advice. As I wrote above, all my investing needs are covered. This is just a $5,000 experiment. Thanks. Joe.
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Comments
<< <i>I have an "extra" $5,000 that I intended placing into a 5-year CD >>
That is probably one of the worst investments you can make right now.
You would do better putting it into a decent stock that has a nice dividend.
As far as silver is concerned, I would sell everything you have IMO.
<< <i>Apart from the silver, I have an "extra" $5,000 that I intended placing into a 5-year CD (all my other investing bases are covered) but with interest rates as low as they are I would wind up with a net gain of about $600 after 5 years. As an experiment, I am going to buy coins with the $5,000 with the goal of being able to net better than $600 after 5 years. >>
Good luck. The buy/sell spread on coins makes making a profit tough. You will need for whatever coin(s) you pick to go up double digit percentages to break even. You indicated this $5K is extra - so play with it. The spreads on stocks are much lower if profit is the end. Maybe a good oil company like XOM.
Don't bother with a CD. It ties up your money too long and doesn't return enough to make it worthwhile.
Don't bother with the "experiment". Don't buy any coins with the idea that you will sell them in five years for more than $600 profit. There are no guarantees with coins and you could easily end up losing money if you "have to sell" or if you want to sell at a specific point in time.
Instead, with the money you have saved and the money from selling your silver, buy one or two coins you want to own and will enjoy owning.
Take your time. Don't rush your purchase. Let the money sit in the bank (earning very little interest but available when you want it) until you find the coin that speaks to you.
to add: so you want to try to make a $500+ profit, in 5 years, off coin purchases alone? Is that right how I read it?
Old gold something or another that fits your set with that 5k then?? But I'd still say you could make that 10% quick just in bullion.
All well diversified portfolios should include a percentage of cash, of which a CD is just a form.
Rather than a single 5 year CD, a better approach would be to use a ladder ($1K in a 12 month CD, $1K in a 24 month CD, ... and $1K in a 60 month CD.). This will enable you to take advantage of rising interest rates (assuming they do rise).
<< <i>
<< <i>I have an "extra" $5,000 that I intended placing into a 5-year CD >>
That is probably one of the worst investments you can make right now.
You would do better putting it into a decent stock that has a nice dividend.
>>
Preferred bank stocks to be exact - you should be able to get 5-7%. But on the other hand coins are more fun to look at than a piece of paper.
Why not do both 50/50?
Buy silver, rice, sugar, wicker baskets, anything but the dollar!!
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>Get completely OUT of the US dollar!!
Buy silver, rice, sugar, wicker baskets, anything but the dollar!! >>
I don't entirely understand all the "sell silver" posts , while i don't think it's an ideal time to buy i also don't think we have seen it run it's course either.It hit 50 in the 80's , who's to say it won't surpass that this time around? I think the best buy right now is silver and gold coinage , not bullion , the coin usually has its own premium just for being what it is and with the PM price outweighing it all of a sudden semi rare coins can be had at bullion prices.If bullion slips you dont have as far to fall.
1911-D quarter eagle, AU53: Or, if you are willing to spend just a little more than an even $5000, AU 55. Of all the old gold series, the Indian quarter eagles is by far the easiest to complete as an entire set. Liberty quarter eagles are effectively impossible unless one limits to a sub-set, such as the 20th century issues. Liberty and Indian quarter eagles both have some pretty expensive stoppers. Classic quarter and half eagles are both short sets, but they both have pricy branch mints, and budget-minded collectors (mind you, a relative term, since we're talking about people who collect gold coins) generally have to limit to circulated grades. But, among Indian quarter eagles, the 1911-D is the only key date below MS62. Bottom line, you get this coin and the rest of the set is a breeze. With gold on the rise, a lot of people are looking for sets to build. If gold falls, people are going to switch over to collectibles. Either way, this coin is poised to rise, and at worst should keep its value if everything else bottoms out. I'm a firm enough believer to invest in one of these myself, and I can't otherwise generally afford $5000 coins yet.
MS64 Type III Liberty gold, generic, but not 1904: The premiums between bullion and generic old gold are quite low right now. These coins were worth a lot more just two or three years ago. With gold going up and these coins coming down, the bargain is pretty obvious. I recommend a date other than 1904 because that one date far outnumbers all the others; any other date will be a lot easier to sell later, and might garner a premium. (If you find a 1904 that's an obvious premium piece that is or should be + or CAC, though, go for it.)
1916-D Mercury dime, along with 1921-D: Mercury dimes are cheap silver, and some really spectacular coins can be had for surprisingly little. However, these two key dates will be the stoppers, about which the kids today will daydream. Someone putting together a set will thank you later.
As always, the three traits that successful numismatic coin investors tend to have are: grading skill, dealer/collector contacts, and market knowledge. A person that is above average in all three categories is likely to do well financially. A person that is below average in all three, will tend to lose money or at best break even. The choice of particular coins or series is not all important. There are good deals and burials to be had in every series. A lot more depends on price/quality ratio when buying and how well connected a person is when selling, than whether the coin series is going up or down.
A person paying full boat retail is going to have a difficult time making any money if they tend to sell their coins at wholesale. A person that can buy for close to real wholesale or at least low retail price, and net near retail when they sell due to superior connections and grading skills is going to have a huge financial edge over the first person.
<< <i>Here's some hot picks off the top of my purely speculative head. (Note that graded coins assume PCGS or NGC.)
1911-D quarter eagle, AU53: ... >>
scottgardener, thank you for your reply and analysis. You have done exactly what I was looking for, given me a new avenue to think about. I have never done very much with gold but I will definitely be thinking about it now as well as the other points you mentioned.
I think I confused the issue for some in my opener but I appreciate the concern in the replies in trying to guide me. To hopefully ease the concern, please note that this $5K is discretionary money and will be used to purchase coins and nothing else regardless of whether the purchases make or lose money.
Joe.
Beyond that, capped bust type in original au or better would, IMO, be a "relatively" safe play.
Tom
<< <i>There is a 1788 au-58+ Connecticut on CRO's website that is the nicest Connecticut I have ever seen. It is pricey and I have no idea if you will break even or make money on it, but that is what I'd like to have in my coin box in 5 years. I should note that I have no affiliation with CRO, don't even know them and haven't purchased a coin from them yet, but that will change, I wager.
Beyond that, capped bust type in original au or better would, IMO, be a "relatively" safe play. >>
Thank you. This is an area that I only gave some fleeting thought to when I was visiting DC and happened to see some colonials for sale in the gift shop of one of the attractions but I don't recall which one. As I recall, the prices were really not that bad considering it was a gift shop and when I returned home I was upset with myself that I hadn't purchased at least one.
Joe.
<< <i>A five year CD?
I tried not to respond to these comments because they were not what I was looking for when I started this thread but since this seems to be a hot topic I will respond.
Based on some of the responses, I am led to believe that no one should have any cash and therefore if you responded like the above that you also don't have any cash meaning that you are fully "invested" (other than CDs or T's) at all times. Isn't it possible that at some dollar amount of net worth and/or (guaranteed) income that it is not necessary to be fullly invested at all times and that in fact, it may not be wise to be fully invested at all times?
I have never "lost" any money in a CD.
Joe.