How will the upcoming bear stock market affect the coin market?
Desert Moon
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Love to hear your thoughts on this. I want to sell some things but the next couple years may not be optimal.......
Best, SH
My online coin store - https://desertmoonnm.com/
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My crystal ball for all future events is quite cloudy.
When people take a hit in there 401k money, they feel less inclined to spend any money they may have. New cars, boats, vacation homes, and discretionary spending all take a hit. Spending by the ultra wealthy doesn't seem to be impacted.
Maybe not so good for sellers, but great for buyers.
Not so much today. Four gas stations next to each with the same price for gas. All it takes is for one of them to lower their price... great for the buyer, not so great for the seller if they want to be competitive.
It will equalize eventual. Then the pendulum continues its swing the other way.
The stock market and the high end coin market are positively correlated from what I have seen. If the economy were really booming, and the metals were in a bull market, many numismatic coins would be also in a bull market.
It didn't hurt after the 1987 market fall and recession that coin grading was taking off and there was a limited supply of certifieds in the late 80s to spur crazy highs then. People had a natural suspicion of Wall Street then too.
Death and taxes are imminent. This is why I buy and sell every day.
``https://ebay.us/m/KxolR5
Do you think that the rapid growth of the stock market over the last 8-10 years affected the coin market? I don't think it affected it much. Over the last 5-10 years coin prices have been down while all of the markets have been up significantly. I think coins will continue to underperform relative to the market, wherever the market happens to go. The only exception to this will be if we get another gold and silver craze. Really high gold and silver prices inflated a lot of coin prices above and beyond what you'd expect from the bullion value change alone back in ~2010.
I would not wait to sell when the macro trends for coin prices are down. PCGS 3000 index has been pretty much monotonically decreasing for years. As someone who has been collecting for <10 years, coins have never been an investment for me. For the entire time I've been collecting, a very conservative and modest treasury bond would be a better use of my money than coins.
If you are considering selling your coins so you can buy other coins, then it doesn't really matter what the coin market is doing. If the market is down and you sell your coins for less, then that means that same money will allow you to buy an equivalent set of coins for less as well. You get parity (minus transaction/shipping costs). The idea of timing your sale only matters relative to other types of investments, which are almost always better than coins. If you want to sell your coins for something that isn't an investment like to buy a boat....then, well...what do you want more? coins or a boat?
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
Less money, even if it's on paper, means the average person feels less fortunate and will apply stricter spending habits to maintain a comfortable lifestyle. Let's face it, it's nice to have a warm home and a plate of food over a grip of plastic covered coins. We can only hope the Fed has it right and the economy is healthy enough to tolerate what is going on in the stock market and not damage the employment numbers.
"A dog breaks your heart only one time and that is when they pass on". Unknown
If you absolutely know the stock market is going to be a bear market, I'd focus on making money off of that. Then, you probably won't need to sell things.
I personally believe that the economy is strong, but, the stock market got way ahead of itself and needed a correction. That happened as we are at 14% off. I still see political risk from the special counsel report. I do not think that that is priced in. The VIX is going up every since I took 2/3rds out of stocks. I see the VIX in an uptrend and I am looking for a spike before reentering the market.
As for the coin market, it may slow a bit, but that just means buying opportunities.
My dealer friend said his big customer pulled his Fun auction bids ,,,$100,000+ ,,,,,,, delayed his buys at Fun show
No doubt that both the stock market and coin market are going to drop more... How do I know? Because I'm still buying. Based on my past history, when I start selling the bottom is probably near.
Usually this time of year people come in my office wanting LOTS of crisp $50 bills to give to family and friends for gifts. I order accordingly to make sure we have enough for the demand. This year we are seeing the same people...but they are asking for crisp $100s! An employee of mine were just discussing this a few hours ago. I think that the "everyday money" people are spending is still pretty strong. I have also been outbid on lots of items. Nice(r) coins are still selling pretty well in certain areas
Rich people do NOT feel rich and will loose enthusiasm
this time it could be painful. beware of FUN being a "dead cat bounce"
My real question is how do you know the stock market is about to tank?
If you feel that way you can double dip....sell the market short....make all your money, then spend it on beaten down coins.
A double win (assuming you are really ready to put your money where your mouth is)
I think the stock market has already taken most of its hit....and I put my $$$ there.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
Wouldn’t it be likely that decreased confidence in stock market would lead investors to hedge in commodities such as gold? If gold goes up the value of generic coins would at least increase. As for rare coins, I could see stock market woes having a negative impact. I wasn’t a player in the coin market during the last downturn, but I imagine whatever happened to the coin market in 2009/2010 would be instructive of what could happen?
What do you mean the coming bear market? Don’t get caught up on the definition of an overall market decline of 20 percent. A huge portion of companies in the S&P 500 have been below that figure — and worse — for some time.
By the time all the indexes get to 20 percent, you will already have lost your behind.
I don’t worry about my collection. It’s a hobby.
I have been short the market for a few months now. I am ready, willing, and able to buy your cheap coins. I'll wait until the pure panic sets in though, which has not happened yet. I will also be looking to buy coins that were graded in the last year. Many are more conservative than Rattler standards.
PS, if you are so scared, get your money in cash, which will bring you 3% anyway.
A long time friend and fellow coin collector of long time standing were recently discussing the issue of where to invest (not speculate, invest). We came to the conclusion that nothing looks good at the moment. The stock market is overpriced (even with the recent pullback), housing is overpriced, collectibles are continuing their long term fade and interest rates for savers are still poor (though not as poor as in recent years).
In my neighborhood many large new houses have been built where older, much smaller houses once stood. I'm guessing that most of these new houses have both high real estate taxes and high jumbo mortgage payments. Nearly all the buyers of the new houses are young. These young people have yet to go through a recessionary period. They are in for quite a shock when they see just how quickly the real estate market can turn on them. The investors who are funding the building of these new, large houses are still going strong. If history repeats itself they will keep building the new houses until the very last hope of success in selling them is extinguished.
My area is heavily dependent on the auto industry. Jobs in that industry are likely to decline sharply as more and more production is switched to electric vehicles. Electric vehicles have far fewer moving parts than those with internal combustion engines and will need fewer workers to assemble them. These declines will happen even if there is no recession. If there is a recession things will likely be much worse because the auto companies now don't have inexpensive vehicles they can fall back on. $46,000 pick-up trucks are likely to be a tough sell in a recession.
How will collectibles such as coins do ...
Excessive fear is a positive indicator. We haven't hit total capitulation yet but it is starting to become apparent.
Dry powder is ready to deploy.
I’ll still be paying strong for pretty widgets.
Markets always tank (correct) after bull markets, always have and they will continue to do so far past our lifetimes. Ten year bull market fueled by the lowest interests in the known universe fueled asset prices, just like they did in prior recent booms.
The question now is just timing and the size of the correction. fed fund rates rose yesterday and they will rise again in 2019. This last .25 bps increase IMO is the catalyst that will trigger much larger sell offs in the very near future.
As for coins, the dynamic is different than in 2010-2012. The economy was still very lackluster after the 08-09 near financial meltdown, yet coins were strong and saw rising prices.
Coin prices have been dropping pretty solidly in 2017 and now very noticeably in 2018 and this during the height of the Bull market boom.
The next sell-off or financial crisis (depending on the size of the sell-off) again, IMO only, will bring coin prices down much lower coupled with a shrinking collector base. Coin collecting has such a strong base and it is a very large collectible market that I think a floor on prices will stabilize the coin market at some point.
Many of the stock guys saw this coming but did not really ant to believe it.
With the market perceived as cheap I think people will buy stocks vs anything other then anything other then gold coins right now.
My stock gusy are saying there is more pain to come.
In the end, its a head game
some smart posts here about the market!
...
The smartest would be, "I really do not know because I cannot predict the future." Lots of responses sound smart and will prove to be anything but that in the future. A few will get it right this time but got it wrong last time and will get it wrong next time, too. Remind me, how many multi-billionaire financiers do we have on the forum?
Housing market has turned downward in New Jersey, interest rates up, etc. $54,000 pickup trucks are ridiculous, unless you NEED one and can make money with it.
Rare coins. I got cash and I am waiting, I got dry powder, dollar bills for wading and lead for balls. LOL
Now, then it's all going to work out just fine, monetize the $100 trillion debt, then raise the ceiling.
Buy anything with no money down, 10 to 1 on performing (BANK RATIOS) loans.
It's all bits and bytes. Anyway. Right?
**_who is John Galt?
Me? I am happy being the son of an Ohio garage mechanic.
My random musing should clear the query up._**
"The stock market is overpriced"
"Housing is overpriced"
"Collectibles are continuing their long term fade"
One of these things is not like the others...
My experience with coins and stocks is that short term, losses in the stock market = pull back in coin buying; however, during longer periods of stock market weakness, money filters into the coin market.
The truth is that there's no way of knowing, and if you buy as an investment, you'll tend to do poorly over time, while people who buy as serious collectors tend to do better, not because of market timing, but because the knowledge of the objects that they're collecting gives them an edge.
I really wish that the marketers of the '80s and '90s hadn't turned most collectors into half-wit investors.
What is now proved was once only imagined. - William Blake
Remind me, how many multi-billionaire financiers do we have on the forum?
They don’t tend to call themselves out.
Smitten with DBLCs.
Nothing to worry about, trickle down is in effect.
"A dog breaks your heart only one time and that is when they pass on". Unknown
The stock market and coin market don't really always go hand in hand. As collectors get itches they need to scratch in any economy so if you have the right stuff it will always sell for a good number. All that being said I'd start considering selling now as my Magic 8 Ball expects the wheels on the bus to fall off daily until January 2021.
There are many forces driving all of the markets, including ours, so it’s easy to oversimplify things and come to the wrong conclusion. Nevertheless, I’ll try. If I believed that the economy will continue to slow, and that inflation and interest rates will continue to rise, I would short seven figure trophy coins and go long on three and four figure “investment grade” coins.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I agree, except that the investment mentality really got started in the 60’s.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
How about buying a stock that pays a 6-10% dividend every Quarter and has done so for the past 15 years. It trades between 3,50 and 4.25 $ CAN. It is very tightly held.
Better than coins?
I recently asked "Bruce" a long time part owner of the local coin shop what he collects? He said, "$100 bills!"
I don't believe stocks and coin prices are correlated. Coins continued to go up in value during the big 2000-2002 dotcom/911 bear market.
Either the correction is close to running is course, or a bear market is starting (how's that for a forecast?). I think it is a tariff induced bear market, which have affected most wholesale prices. Good time to buy into stocks.
Much more pain on the way for the economy. It's going to make 2008 look like child's play. Of course the gooberment will just create more debt and print more $$$ out of thin air to fix the crisis which could renew interest in the PMs. That could translate into some crossover to the collectable side. Or not.
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
No idea where this is headed but I for one am more likely to buy coins when I have a good feeling about the stock market, which is generally a bad approach, since for a lot of coins you should buy them when available, not when you have the cash.
@spacehayduke - your question implies that the coins you want to sell are a significant part of your net worth. Thus, I surmise that an anticipated "hit" on selling them is uncomfortable for you. If this isn't the case, then you are playing with hobby money and consolidating your collection so that you have funds to buy other desirable coins is play money. If that's the case, sell now to have discretionary funds available for future purchases.
Regarding the stock market, who knows? Some trends though are unfavorable. 10,000 boomers are retiring each day and they have to live on something. That means they must sell their holdings and as this group expands, more selling will occur which is bad for the overall market in my view. It is also likely that volutility will continue since the number of private companies listed keeps shrinking and more money is concentrated in FANG like companies. Throw in the ETF craze and we have a flock of birds reacting to present day emotions that prompts further selling.
I don't have any investing secrets other than to say spread your investment risk!
"Got a flaming heart, can't get my fill"
Approximately the same as really smart numismatists.
Saving the max in the 401k, max out my wife and myselfs Roth's.
Looking to retire by 55, and I have 22 years to do that. So I welcome bear markets to get more bang for my buck. Sure, I don't buy as much numismatically, but I still get the itch no matter what the markets are doing.
My thoughts are than instability in Washington, (departures, investigations, gridlock, etc) combined with tariffs are the root cause to all of this countries current economic difficulties. Tax cuts, repatriated money, wage increases and enormous government spending should be plenty of fuel for growth. Growth is slowing because of the above.
I'm sure the orange one want's a successful run for a second term. To avoid a recession during election season he's going to need to negotiate his way out of economy crippling tariffs. If he does that the recession threat is diminished. If not, look out below.
I agree. Would all the retired people go back to work now, please? You've had enough time sitting around playing with your coins.
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
They came through these parts, Wolfe showed up in a RV with an entourage of about 20 people, that little fritz guy showed up in a stretch limo for the big pick. Moe knew they were coming 2 months in advance. They already picked out and researched all the items to be "picked" on the show. Total frauds, just like NT silver eagles and little green stickers. Buy low and sell high, everything else is just noise.
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
C no Bear yet
oops.
Coin market will soar especially if investors return.
However many coming to shows are broke. Market needs people with money hot to buy.
On both sides of the tables.
If you like your coin, you can keep your coin.
``https://ebay.us/m/KxolR5
Not really a significant part of my net worth, but I feel I have overextended my collection to too many pieces and want to reduce it by 1/3 in value and number. I will keep the spectacular pieces (A, A+ for the grade) and sell the B for the grade coins. I can certainly live without the money no problem but I also simply think the collection is too big so I would like to get max value when I sell. Of course if I do sell and have that spare cash, I would want to invest it. Bear market is an optimal time to make big money down the line.......
Great discussion everyone, very informative.
Best, SH