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Will the US coin market enter a new bull market in January?
MrEureka
Posts: 23,947 ✭✭✭✭✭
The stock and bond markets have, since the election, indicated that people expect a decrease in tax rates and an increase in inflation, both of which would be good for the coin market. Whether or not they are proven correct, it seems to me that investment-oriented coin retailers will have a strong pitch to make to buyers, and the demand created should drive the coin market significantly higher for much of the next year.
Or am I missing something?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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That seems perfectly logical to me. I manage a financial advisory team at a major Wall Street firm. I pay very close attention to trends in most asset classes / investment markets.
Further, a friend of mine is head of gold strategy at another major firm. He is quite bullish on that metal. However, that is no surprise.
That said, I would still spread your risk around in multiple investment categories.
my opinion is that there is a lot of uncertainty right now and that causes people not to spend money on luxury items.
While it makes sense, the reality is the Gov't can't afford less revenue and higher interest rates on the $20 trillion debt.
What's the estimate on the revenue on a tax amnesty for repatriation of all the off shore corporate cash? Enough to make up a revenue short fall from cutting taxes??
Rising interest rates is good if you are looking for return, bad if you have variable rate debt.
Overall, I'm neutral on whether I'll be a net buyer or seller of coins in 2017.
I think the fact that the market is down 30-50% would be the sales pitch needed to make some good sales.
Otherwise, I would say the downturn in medals have really affected pricing and unless the medals turn I would think price increase would be slow at best.
Of course from a dealers perspective I would love to be wrong
When was the last Bull Market for coins?
I agree that the government can't afford to do it, but that doesn't mean they won't. Besides, expectations drive the market, and the market clearly expects the government to cut taxes.
I do think that coins will be a good place to be for the next year. Beyond that is a much tougher call.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
2005-2008
Not really. When you tell an investor that he should buy something because the price has dropped, his first thought is usually that it's a loser and that it will drop further. One of the reasons that most people tend to "buy high and sell low".
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
and maybe you can also say 2010-2013 with the major metals jump up
I would say that the last bull market for US coins ended in 2008, broadly speaking.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Very true. Collectors may actually cut back some. But I expect investors to more than make up for any drop in demand from collectors.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Long term investors are the ones that buy when the price drops. Short term sell afraid to hold a falling knife.
As a collector who loves coins, a falling market can give me more coin for my buck and could be a good reason to come back in
I believe the tax rates - for taxes due by 15 April 2017, will not change, they are set... so no relief in that area... perhaps changes for 2018 are possible....that could free up some income... Cheers, RickO
As they say, there are no real long term investments. They're just short term investments gone bad.
Well, maybe not always, but the point is valid.
Anyway, if you think you're a long term coin investor, you're probably not really an investor. You're a collector.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Will the US coin market enter a new bull market in January?
The coin will leave the current Bear market behind but I doubt it's as soon as this January and doubt it will be in 2017 at all.
I'm with MrEureka, I buy coins that I plan to hold for a long time, not as an investor but because I'm a collector.
Andrew Blinkiewicz-Heritage
What about the aging population and decrease in new collectors? I see the trend for high quality continuing, but the low grade stuff will suffer.
Same here. When Russ was alive, I had him off my dreck about a year ago.
No regrets.
Strong dollar means low metals prices. I haven't got my hopes up, although I do wish the slow drift lower in coin prices would stop.
I tend to agree with your prognostication, Andy, though when it comes to bullion and/or stock investment, I am not the guy to ask.
Tom
Demographics is of little concern to short to medium-term investors. Anyway, they're not going after the low grade stuff that you expect to suffer.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
All other things being equal, this is true. But there are many things that will not remain equal. There are many forces at play.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I believe that base metal circulating moderns began a secular bull market shortly before the election. Any inflation and poor strock market caused by that inflation will simply broaden and heighten this trend.
Keep in mind though that this time inflation will show up preferentially in corporate profits rather than costs as in previous inflations. This will tend to keep the stock market a little ahead of inflation and limit the damage to stock prices caused by the effects of inflation on the economy. Inflation is very inefficient and spawns huge waste but it is very effective at eradicating debt.
People would be advised to watch out over the next few years though it will soon be possible to actually "invest" again rather than gambling on markets and the actions of bankers.
Choice coins, and choice coins only, will probably experience at least a mini-boom if more money becomes available to the wealthy. Ordinary and common coins will continue to decline as the middle class will find out that the new found wealth is not coming their way. Personal debt will continue to be a problem for many consumers who have recently overspent on housing, education and, especially, cars/trucks/SUVs that they can't really afford and really don't need. The next downturn in the auto market is likely to be severe and the US auto companies will find themselves locked into unfavorable union contracts that they never should have agreed to in the first place. A substantial percentage of current car loans are considered to be sub-prime. Health care costs will continue to rise and will eat up a good percentage of any wage gains that are made by middle and lower class individuals. Coin purchases need to be very, very selective.
Rising interest rates make the opportunity cost of owning non-cash generating assets greater. Now provided rates stay relatively low I would think that the coin market would be relatively stable.
Latin American Collection
Last coin bull market was from 1996 - 2008. Many collectibles' markets followed that run, from classic muscle cars to antiques, etc. It also coincided with the previous bull run in the residential real estate markets. I consider the 2009-2016 coin "bear" market to be one of the longest ones we've seen in recent decades....certainly longer than 1990-1995 crash. The US coin market has benefited greatly from the baby boomer demographics of 1960-2008 as have other collectible and tangible assets. You can't count on that driver for the next 20-30 years.
The USDollar is not all that closely tied to the coin market. Better comparisons would come from stocks, real estate, real interest rates, gold and silver prices, and the USDollar pair of USD/JPY as well as the Aussie and Cando. The US Dollar screamed higher from 2014-2015 (80 to 100)....yet the rare coin market had a rather nice bounce in that period as well.
Nope.
There is always the temptation if you have a lot of cash to sink it into investments that pay more than the single digit returns of most "safe" options. There are usually opportunities, I recommended options on gold stocks like gdxj to a sharp real estate guy before the pm mini rally this year. But you have to know when to get out. Numismatics is usually a long term position based on certain fundamentals. In the NYC metro area the economy is greatly affected by wall street type investments as much as people have hostility to it. Don't put all your eggs in one basket. Read zero hedge and other alternative news sites and see how many sharp pros are going into cash now.
I think it's likely we'll have an improved economy and also a more bullish coin market in the coming years, partly due to the change in the direction of the nation politically, and partly because we've had a pretty good "adjustment" period in terms of having a downturn in the coin market. I think we're due an upswing in the coin market.
Income levels are still problematic
Experience the World through Numismatics...it's more than you can imagine.
For 75% of America they are and that's not going to change this winter.
No - not unless metals advance bigtime. I track the numismatic coins via the PCGS Indexes.
I have won many coins on the Bay at 55--60 pct MV. Retail sales have slowed considerably. No bull market for coins on horizon I can see.
Seated and Barber material tough get below MV however.
I am always looking for early 20th century issues - PCGS Gold, Barber, SLQ, Buffalo 5c. A never ending thirst but have to pay high get them.
I think grading inflation will counteract any gains driven by the economic conditions.
Well I'm depressed. Better go buy something shiny.
I don't think so. Many relatively expensive coins (for me) have taken a dump in the last three years. Part of it is changing grading standards. Check pricing on MS 65-66 pricing on Liberty Nickels, Barber Coinage, and possibly early 20th century type, like the more affordable SLQs in these grades.
Even pre 1835 coinage below registry set material (and very few can afford the registry set coins from this period) has actually dropped in price during this time period.
To me, this is not an encouraging sign re spending more in numismatics, with the possible exception of an all there pre 1835 type coin, though I certainly wouldn't pay a strong premium for it.
"Seu cabra da peste,
"Sou Mangueira......."
The "US coin market"?
Is that like saying "the US stock market" or "the US real estate market"?
Averages are just that, averages.
Houses in nice neighborhoods near good schools and jobs will do just fine. Stocks of companies with growing businesses and good earnings will do just fine. And nice coins that are hard to find nice will do just fine.
Average quality specific assets will do average, and poor quality, common, easy to find and nobody wants it stuff will do, well, poorly.
Liberty: Parent of Science & Industry
I also think some of the changes on eBay over the past 10 years has hurt the market in general for lower end coins and I don't see this changing for the better any time soon regardless of the economy.
From what I can tell from historic auction prices, 2005-2008 was the peak of a bull market. People were paying STRONG money for even very common Walkers. I'd like to see that again but adjusted for inflation and also increased due to current demand and rarity/scarcity.
“I may not believe in myself but I believe in what I’m doing” ~Jimmy Page~
My Full Walker Registry Set (1916-1947)
https://www.ngccoin.com/registry/competitive-sets/16292/
I think you will see a bull market in properly graded highly desirable coins. Early gold especially. I see collector grade coins and coins in high supply with neutral eye appeal continue to search for a bottom. Cheaper will get cheaper.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I agree with the bifurcated market outlook, with a twist. The higher grade rare material in general I suspect will stay about the same price, with some true rarities moving upward, but most of the higher value coins IMO will tread water due to a combination of economics and demographics. On the other end, the more common lower grade coins will tend to spiral downward in price, just as the American middle class has.
U.S. Type Set
That's as well stated as I've seen.
In fact, I think I'll steal it for a few other places.
A fellow recently purchased a few coins. He is In his sixties. The other day he returned with them and some others that he's had for 30 + years. He said he picked them up for under ten dollars each and the seller then said they were choice uncirculated. He asked me to submit them. With a cost of nearly $300 for grading less than ten silver dollars , in relation to today's uncertainties ( economically speaking), if I were a clairvoyant , I'd be selling the future. Instead I merely sold him the service.
In essence and in short: I have no idea what tomorrow will bring. Heck: I'm surprised I woke up today. I don't expect much and hope still springs eternal for tomorrow . I hope he gets good grades.
What was the question ? Oh yeah: guess the grade or guess the dates or guess the coins. Can you ? The mere mention of "investment" as it pertains to coins, seems criminal, to me.
This SHOULD be a good winnowing out of the coins that are IN slabs but still ugly, scratched, dug, smeared with rubber band stains, obviously previously cleaned. marginal for grade, "netted" by minor problems, etc.
I look at hundreds of coins a week. Some have been on "offer" for months and months and months.
If they were FORCED to sell to get operating capital and sell by unreserved auction, I think the whole market would begin to rise just based on solid-for-grade pieces.
The "stickering" would be a separate issue and if it were possible to challenge stickers, it would do two things: negate some stickers , and get it to mean something.
Dreck is gonna go poo poo. Just REPLACING those coins with decent ones will raise the value of solid ones.
(that is if the flood of dreck doesn't turn to a HUGE waterfall affecting EVERYTHING.
It might.
yeek.
If metals could get some traction, maybe a bunch of bucket shop infomercial coin
peddlers could find a new market for the junk.
Greysheet's Monthly Supplement has an angle on the current coin market: Why coin collecting has a bright future.
I agree with the trifurcated market theory. If you add the comment that generic coins tied to precious metal values will track their respective metals, you can argue for a quadrifurcated market.
Nice to see you posting RYK!
Of course, as scientists, we know that phenomena occur along spectra and continuums, and that categories and labels are human constructions that assist us in analysis and making generalizations, which can then be tested with specific situations.
But yes, agree that the precious metals component of many coins adds a dimension to the numismatic asset class that other collectibles like stamps, comic books, and trading cards sorely lack, that of an underlying intrinsic value.
Many collectors, and I suppose dealers too, use profits from precious metal bull markets to finance the purchase of older, rarer coins, the value of which has very little to do (directly) with precious metals prices. I do this myself, and agree with the thesis that if metals prices increase, that will generally improve short term returns in the broader "the coin market"
Liberty: Parent of Science & Industry
I see more likely possibility of downturn. Website retail sales really low.
Wages have been depressed for sometime and coins not a survival item like food and shelter.
I've been selling into the strenght in the modern circulating coin market but I just don't have much material to sell. It's hard to imagine the supply of this material lasting very long and the strenght seems to only be increasing. There's a little "in the woodwork" but there are no "old time collections" to keep the demand satisfied. If the demand continues prices will be explosive and an inflationary enviroment will just make things that much worse.