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Increase in coin prices over the past decade or two
MidLifeCrisis
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Has anyone ever studied, or is there any data available showing the percentage increase or the rate of increase of coins over the past decade or two?
It's my impression that coin prices have increased exponentially since I was a YN in the late 70s and early 80s and those price increases have been even steeper over the last decade or so.
Is that really true, or do I just hate paying these high prices so much that it's clouded my memory and judgement?
It's my impression that coin prices have increased exponentially since I was a YN in the late 70s and early 80s and those price increases have been even steeper over the last decade or so.
Is that really true, or do I just hate paying these high prices so much that it's clouded my memory and judgement?
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PCGS index
Secondly, Registry competition seems to have driven the prices up for high end coins and the AU58s which have reached mind numbing levels.
Lastly, buying from retail and specialty dealers does nothing for shopping for a bargain. In my opinion, those dealers get their coins from someone who would gladly sell to you before the mark-up. Most recently I know of a hard to find coin, very reasonably priced went through four or five hands at the same show before the collector got it - the original price was a steal; the final was not.
Edit: I guess I need to put in some caveats. Note that I said well selected "collectible", not coin. Demographics have to support the performance and the jury is still out about whether there is a growing collector base for coins. Logically, the rate of return must at least outpace inflation if the demographics remain stable, just for the simple fact that a collectible shouldn't lose "real" value if the collector base is expanding at the population rate. Then the phenonomena of "I got there first" should be worth a percentage point or two, just because future collectors who will replace current collectors must pay a "real" premium to wrest that item from the older collectors who already have the nice stuff and need to be paid for their labor associated with hunting it down, or the buyer pays for the privilege of shortcutting the hunt...either way, there should be a *some* premium over inflation when it changes hands for the buyer to obtain the nicer stuff. So that should put us to at least 5% if demographics (at least)support the hobby. But lastly, if the collectible has good demographics, and the original owner has the vision to understand what's "good"....like the guy who first figured out why an Action Comic #1 was important, or first understood that gold coins would perc up nicely once gold moved off of historic lows....those guys should get paid for their vision. The veteran collectors have that vision. But can you get "killed" by giving up profits to facilitate a profit, or hurt by trying to collect an item with dying interest (instead of rising interest) or poor demographics? Absolutely yes.
Edit x2: By the way, it is true that one can not compare the PCGS 3000 prices to prices prior to that era because of a change in grading definition. However, it's not a stretch to say that an expert collector should expect results like that, because the expert collectors weren't satisfied with an AU58 or a MS63 as a Gem and were seeking out the very best. They knew quality when they saw it, and in general, the expert collectors were the people who ended up with the coins that ulitmately graded as Gems anyway. If you had a time machine and went back to that era, would you come back with just any item labled "Unc", or would you come back with Gems? The experts knew what was what even back then.
But I have never convinced my banker friends to include the value of coins in assessing a suitable line of credit ???
Not very impressive compared to what a well read / studied equities hobbyist could have done over that time.
Some of the less useful "studies" like to quote the old uncirculated prices and extrapolate to current MS65 certified pricing, ignoring that only about 1 in 300 of those old uncs would grade out at MS65 today. It is likely that half, or 150 out of 300 coins bought raw in the old days at unc, land in an AU or problem holder.
So yes, those that knew what they were doing, have been making 8% to 12% annually on their nice coins. However, the average collector is likely more around the 5% range annualized (ex-bullion) after factoring in typical retail or auction spreads and fees and the occasional mistake coin. Then there are taxes, where coins are taxed at a higher rate than some other investments (stocks, real estate). So as always, collect what you like and be happy to break even after five years, and maybe do a bit better after that. As always, past performance may not be indicative and is in no way a guarantee of future results.
An aside: I chuckle at the subject line about the past decade or two, and then read late 1970s and 1980s in the post. Time hasn't stood still, the time frame is 30 to 35 nearing 40 years. Yikes.
BHNC #203
<< <i>An aside: I chuckle at the subject line about the past decade or two, and then read late 1970s and 1980s in the post. Time hasn't stood still, the time frame is 30 to 35 nearing 40 years. Yikes. >>
My question does pertain to the last decade or two...but I wanted to include some perspective by noting how much coin prices have increased since I was a kid.
<< <i>
<< <i>An aside: I chuckle at the subject line about the past decade or two, and then read late 1970s and 1980s in the post. Time hasn't stood still, the time frame is 30 to 35 nearing 40 years. Yikes. >>
My question does pertain to the last decade or two...but I wanted to include some perspective by noting how much coin prices have increased since I was a kid. >>
Cougar gave the basic answer for the last ten years, citing the PCGS 3000 coin index:
>> A start of 58000 then a peak near 74000 around 08 and now back around 67000
Figure about 25% for dealer profit and/or auction fees and shipping, and the average collector is still looking for break even, for coins bought ten years ago.
67000 - 25% = 50250, which is lower than the 58000
Yes obviously, some coins have done much better than the broad averages. However some have done worse. That's why data is useful, because it tends to tell the tale of the average person. The average collector buying PCGS graded coins at retail prices, making no major mistakes such as buying a fake holder, is in the down 12% range for the past ten year period. Internet anecdotes and polls tend to skew towards folks reporting profits. However, a few folks have told stories about relatively poor financial results and their dismay. Especially after some report or study or worse, some huckster, has told them to expect 8% to 12% increases year after year.
This forum skews towards the upper price end for coins, and that is the end that has tended to do better. In the sub-indexes, key dates and early type is among the best performing over the past ten years. Some will cite that, but hindsight makes financial results so easy, not so easy going forward. To think that the best groups for the past ten years will continue to do well for the next ten is foolish, and also can be financially dangerous.
Just click.
As already noted, PCGS also has indexes of coin prices.
<< <i>all the more reason for a collection of Guide Books (Red Books), that is the best way to study the historical prices. >>
Some generic material still hasn't hit 1989-1990 levels.
When I got back into coins around 1995-6, I bought a 1909-S VDB 66R for $3000 and a 1856 Flyer S3 MS65 cost me $27,500 - now $13,500 and $125,000 in the price guides respectively.
Not sure if the trend will continue but I'm getting gun shy at the current levels for pioneer/private gold.