@Mizzou said:
I'm not sure why so many people are saying that coins aren't a good investment. The majority of the coins that I purchased 15 - 20 years ago have gone up in value substantially. Maybe I was just lucky.
Over the last 20 years, the Dow Jones averaged 7.07%
That's the short way of saying it. The longer version is that the DOW went nowhere for 11 yrs (2000-2011)....and then up for the past 9 yrs.....most of that in the past several years. Coins did fabulously well from 2000-2008. Coins can be a great contrarian play while the SM is on hiatus for a decade or longer. Nothing wrong with diversifying 5-15% of one's wealth into precious metals, rare coins, and other tangible items. Usually the best results are from those who study these markets, can pick out winners from years of being in the trenches.
I can think of a number of coins bought out of the 2002 Goldberg's Long Beach sale that have done quite well since then. Of course most of that gain occurred by 2008 - easy doubles and triples....and even better. Must any decent gem type coin bought out of that sale has done quite well. Same for Vermeulle, Benson 1 & 2 and other major sales of that 2000-2004 period including Queller. One would have had a field day buying out of Auction in Jan FUN 2009 through much of 2011...heavily depressed prices and panic selling. Buy nice coins that don't show up that often when things are weak. You could have bought TDN's 1873-cc Trade Dollar out of Vermeulle (raw) for $74,750.
There are outstanding buying opportunities from time to time. The trick is recognizing it when it's there in front of you and acting on it. Doing so is very frequently a contrarian move and requires an emotional gut-check.
5-15% of a person's net worth in tangibles is a number I'm very comfortable with. I have this lingering suspicion that many people are up to their eyeballs in coins, neglect a rational plan for retirement, carry debt, and churn their collection over and over frequently, incurring huge transaction costs to fuel what is basically a collecting addiction.
Yes....churn.
Unless you are a dealer, you should not be turning things over every 5 to 10 years. If you buy something and sell it within 2 years, you probably did not think through the purchase carefully enough.
Yes, it is a bit of an addiction. And most addicts can't go weeks or months without a fix. But, it's okay if it's just a hobby and you are having fun. But in that case, consider 100% of money spent to be sunk costs never to be recovered.
@DollarAfterDollar said:
The key to anything in numismatics being an investment is to buy it right. Therefore, know what it's actually worth before purchase. Once you're buried in a coin, you'll have a harder time selling at a fair price. Buy only coins certified by reputable third party grading companies, don't pay buyers premiums whenever possible and keep a list of what you have, when you got it and where and what you paid.
When you're gone your kids/grandkids have a starting point. Finally, you MUST also sell a coin here or there. It's the only way to know if you're doing this right or wrong.
There are 2 things here worth amending/correcting:
the problem with an "investment" of any type is not knowing what it's worth. You need to know what it is going to be worth when you are ready to sell it. And you can never truly know that.
The "buyer's premium" argument is specious. Especially with regard to #1. If you believe the current value of the item is $100, it makes no difference how you get to $100. $100 + no BP or $80 + $20 BP is still $100. In fact, would you rather pay $100 + no BP or $75 + 20 BP?
@jmlanzaf said:
Yes, it is a bit of an addiction. And most addicts can't go weeks or months without a fix. But, it's okay if it's just a hobby and you are having fun. But in that case, consider 100% of money spent to be sunk costs never to be recovered.
Hmmm, the way I see it is that for me in my hobby, the only way that my costs are 100% sunk costs are if I give everything that I have accumulated away for free.
@jmlanzaf said:
Yes, it is a bit of an addiction. And most addicts can't go weeks or months without a fix. But, it's okay if it's just a hobby and you are having fun. But in that case, consider 100% of money spent to be sunk costs never to be recovered.
Hmmm, the way I see it is that for me in my hobby, the only way that my costs are 100% sunk costs are if I give everything that I have accumulated away for free.
Again, I would assume it is worthless after you buy it. If you ever get anything back from sell it, bonus.
Especially since we are talking about churn. Buy for $100, sell for $80, buy for $100, sell for $80. If you do that 5 times, you lost the entire $100 even though most people will trick themselves into thinking they got $80 back on the last sale because they forgot they lost the $20 four times before then.
If you churn, I don't care what you think you sold it for in the end, you probably lost 100% or more along the way.
@Mizzou said:
I'm not sure why so many people are saying that coins aren't a good investment. The majority of the coins that I purchased 15 - 20 years ago have gone up in value substantially. Maybe I was just lucky.
How would you feel about providing a few examples?
Sure -
1906-S U.S. / Phillipine Peso XF45 - Purchase Price $3000 Current Price $5000+
Several Mexican 50 Peso's MS62/64 - Purchase Prices $450 - $700 Current Prices $1500+
Cuba 5 Peso MS66 - Purchase Price $250 Current Price $500 +
These are a few off the top of my head, the majority of my purchases have doubled in price or more - Not bragging just sayin'
Wisdom has been chasing you but, you've always been faster
I think coin collecting should be for fun first and foremost . Over the years I have made money and lost money ..... no big deal . Actually making mistakes has made me a better collector .
I still use grading experts when looking at auction lots .... even if I’m there in person .
And I pay him to do so . No big deal .
It’s no big deal because it’s not what I do for a living . It’s a hobby and I have lots of money in coins ( at least for me ) .
Some persons on this board share knowledge , statistics, and wisdom when it come to money, coins, and investing .
That’s fine .
But what I want to know is what you actually DID with your money ? What did you learn and would do differently ?😊
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
@Mizzou said:
I'm not sure why so many people are saying that coins aren't a good investment. The majority of the coins that I purchased 15 - 20 years ago have gone up in value substantially. Maybe I was just lucky.
How would you feel about providing a few examples?
Sure -
1906-S U.S. / Phillipine Peso XF45 - Purchase Price $3000 Current Price $5000+
Several Mexican 50 Peso's MS62/64 - Purchase Prices $450 - $700 Current Prices $1500+
Cuba 5 Peso MS66 - Purchase Price $250 Current Price $500 +
These are a few off the top of my head, the majority of my purchases have doubled in price or more - Not bragging just sayin'
Thank you. I thought you were talking about U.S. coins, about which I would know something.😉
Why do you think you’ve had such good success?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Keep in mind, this is over a 15 - 20 year span, I would think that most gold and rare - scarce coins would go up in value over that amount of time.
"most gold" would only go up if gold went up in that time frame. No guarantee of that. Look at 1980 to 2000, for example. Or 2010 till now.
"Scarce" coins don't always go up. Rare coins usually do. But, again, do they go up enough to account for inflation much less the opportunity costs of holding. The answer is typically no. Certainly you can find coins that have gone up. But you will also find coins in that exact same time frame that have gone down.
I mentioned the Commems. Some of those commems have 10,000 or less examples. For U.S. coins they are scarce, but they have gone nowhere but down for 30 years.
Even coins like S-VDB lincolns and 16-D dimes in collectible grades have been losers over the last 20 years as the price has been fairly stagnant.
If you are talking Gem 18th century gold. Then, sure. Up til now it has gone up at a reasonable rate. But you still need to compare returns of other investments over the same time frame. And, as the ads say, "past performance is not indicative of future performance".
There's always the risk factor in any investment. I also have some old Colt revolvers that have done very well over the last 20 years. However, I'd rather not talk about the stamp collection that I had.
Wisdom has been chasing you but, you've always been faster
@Mizzou said:
Several Mexican 50 Peso's MS62/64 - Purchase Prices $450 - $700 Current Prices $1500+
Those are basically bullion. Gold was at $400 or so 15 years ago and it's $1750 today. Any increase in value has nothing to do with the collectible coin market.
@Mizzou said:
Several Mexican 50 Peso's MS62/64 - Purchase Prices $450 - $700 Current Prices $1500+
Those are basically bullion. Gold was at $400 or so 15 years ago and it's $1750 today. Any increase in value has nothing to do with the collectible coin market.
Just sayin'.
Maybe not...but it turned out to be a pretty good investment. Years ago I bought a 1/4 acre lot in Missouri for $5000. It had a burned out shed and piles of trash/tires everywhere. Six months after I purchased it the city rezoned that area from "residential" to "commercial" property. Sometimes you just get lucky like that.
Wisdom has been chasing you but, you've always been faster
@Mizzou said:
Six months after I purchased it the city rezoned that area from "residential" to "commercial" property. Sometimes you just get lucky like that.
I suppose, but even though people do collect them, it's unlikely MS62-64 50 pesos will ever get rezoned from "bullion" to "collector" status. A quick check on eBay shows there are raw pieces that have recently sold for more than graded ones.
If your looking for wealth to pass down I would use other investment vehicles very few coins would be considered an investment. If you like coins collect what you like but read up first on the series you like. Common date gold coins are always going to hold good value they will very as a commodity value wise but who knows in the future
I am beginning to collect again, myself, OP. Personally, I stick with US pre-1933 gold. I wanted my first great coin to be a nice, slabbed $20 gold piece, so I saved up and bought from a reputable dealer. As these coins are quite expensive, I do not see myself being able to purchase more than a few each year. My main focus now is on Indian quarter eagles, which you can definitely get for anywhere from $300-$400 a piece, depending on the grade. If you want to pay a smaller premium over melt and still go with pre-1933 gold, but do not have $2000 to drop, I would then suggest Indian half eagles. You can get the half eagles for a smaller premium over spot vs. the quarter eagle counterparts. For some reason, I just like the little guys, though.
If you are going to pass something down, I would definitely opt for pre-1933 gold. It is just more "special" and the history adds to the numismatic value. I just don't find modern bullion very interesting...
@stownsin said:
I am beginning to collect again, myself, OP. Personally, I stick with US pre-1933 gold. I wanted my first great coin to be a nice, slabbed $20 gold piece, so I saved up and bought from a reputable dealer. As these coins are quite expensive, I do not see myself being able to purchase more than a few each year. My main focus now is on Indian quarter eagles, which you can definitely get for anywhere from $300-$400 a piece, depending on the grade. If you want to pay a smaller premium over melt and still go with pre-1933 gold, but do not have $2000 to drop, I would then suggest Indian half eagles. You can get the half eagles for a smaller premium over spot vs. the quarter eagle counterparts. For some reason, I just like the little guys, though.
If you are going to pass something down, I would definitely opt for pre-1933 gold. It is just more "special" and the history adds to the numismatic value. I just don't find modern bullion very interesting...
I'm with you on the Pre-33 US Gold, but once you have 1 of each denomination, I found it pretty boring as I wasn't enamored of either a year-set or mint-set. Quickly moved on to a European sovereign-sized search covering all the different rulers. Amazing the variety to be found there, and many nice coins can still be snapped up for a low premium over melt (at least back to the 1800 century in many cases)..
If you want to invest in bullion, stick to the coins with the lowest premiums, because premiums often vanish when bullion runs up and it’s time to sell.
If you want to invest in rare coins, where the bullion value is essentially irrelevant, there are many ways to go. My advice would probably mostly depend on your time horizon, how much effort you want to put into this, and your budget.
One more thought, FWIW. Most seasoned collectors and dealers alive today have focused on relatively common coins in uncommon condition, because that’s where the money was. I suspect that that is no longer a winning strategy, at least for US coins. It’s a long story, but important if you’re approaching coins as an investment.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
MrEureka, your response is interesting. Can you elaborate on your perception of the shift away from conditional rarity? This has been a central feature of the business models of some national dealers.
Member: EAC, NBS, C4, CWTS, ANA
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
Comments
Yes....churn.
Unless you are a dealer, you should not be turning things over every 5 to 10 years. If you buy something and sell it within 2 years, you probably did not think through the purchase carefully enough.
Yes, it is a bit of an addiction. And most addicts can't go weeks or months without a fix. But, it's okay if it's just a hobby and you are having fun. But in that case, consider 100% of money spent to be sunk costs never to be recovered.
There are 2 things here worth amending/correcting:
Hmmm, the way I see it is that for me in my hobby, the only way that my costs are 100% sunk costs are if I give everything that I have accumulated away for free.
Again, I would assume it is worthless after you buy it. If you ever get anything back from sell it, bonus.
Especially since we are talking about churn. Buy for $100, sell for $80, buy for $100, sell for $80. If you do that 5 times, you lost the entire $100 even though most people will trick themselves into thinking they got $80 back on the last sale because they forgot they lost the $20 four times before then.
If you churn, I don't care what you think you sold it for in the end, you probably lost 100% or more along the way.
Sure -
1906-S U.S. / Phillipine Peso XF45 - Purchase Price $3000 Current Price $5000+
Several Mexican 50 Peso's MS62/64 - Purchase Prices $450 - $700 Current Prices $1500+
Cuba 5 Peso MS66 - Purchase Price $250 Current Price $500 +
These are a few off the top of my head, the majority of my purchases have doubled in price or more - Not bragging just sayin'
Wisdom has been chasing you but, you've always been faster
I think coin collecting should be for fun first and foremost . Over the years I have made money and lost money ..... no big deal . Actually making mistakes has made me a better collector .
I still use grading experts when looking at auction lots .... even if I’m there in person .
And I pay him to do so . No big deal .
It’s no big deal because it’s not what I do for a living . It’s a hobby and I have lots of money in coins ( at least for me ) .
Some persons on this board share knowledge , statistics, and wisdom when it come to money, coins, and investing .
That’s fine .
But what I want to know is what you actually DID with your money ? What did you learn and would do differently ?😊
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Thank you. I thought you were talking about U.S. coins, about which I would know something.😉
Why do you think you’ve had such good success?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Keep in mind, this is over a 15 - 20 year span, I would think that most gold and rare - scarce coins would go up in value over that amount of time.
Wisdom has been chasing you but, you've always been faster
"most gold" would only go up if gold went up in that time frame. No guarantee of that. Look at 1980 to 2000, for example. Or 2010 till now.
"Scarce" coins don't always go up. Rare coins usually do. But, again, do they go up enough to account for inflation much less the opportunity costs of holding. The answer is typically no. Certainly you can find coins that have gone up. But you will also find coins in that exact same time frame that have gone down.
I mentioned the Commems. Some of those commems have 10,000 or less examples. For U.S. coins they are scarce, but they have gone nowhere but down for 30 years.
Even coins like S-VDB lincolns and 16-D dimes in collectible grades have been losers over the last 20 years as the price has been fairly stagnant.
If you are talking Gem 18th century gold. Then, sure. Up til now it has gone up at a reasonable rate. But you still need to compare returns of other investments over the same time frame. And, as the ads say, "past performance is not indicative of future performance".
There's always the risk factor in any investment. I also have some old Colt revolvers that have done very well over the last 20 years. However, I'd rather not talk about the stamp collection that I had.
Wisdom has been chasing you but, you've always been faster
Those are basically bullion. Gold was at $400 or so 15 years ago and it's $1750 today. Any increase in value has nothing to do with the collectible coin market.
Just sayin'.
Maybe not...but it turned out to be a pretty good investment. Years ago I bought a 1/4 acre lot in Missouri for $5000. It had a burned out shed and piles of trash/tires everywhere. Six months after I purchased it the city rezoned that area from "residential" to "commercial" property. Sometimes you just get lucky like that.
Wisdom has been chasing you but, you've always been faster
I suppose, but even though people do collect them, it's unlikely MS62-64 50 pesos will ever get rezoned from "bullion" to "collector" status. A quick check on eBay shows there are raw pieces that have recently sold for more than graded ones.
If your looking for wealth to pass down I would use other investment vehicles very few coins would be considered an investment. If you like coins collect what you like but read up first on the series you like. Common date gold coins are always going to hold good value they will very as a commodity value wise but who knows in the future
https://www.pcgs.com/setregistry/quarters/washington-quarters-major-sets/washington-quarters-date-set-circulation-strikes-1932-present/publishedset/209923
https://www.pcgs.com/setregistry/quarters/washington-quarters-major-sets/washington-quarters-date-set-circulation-strikes-1932-present/album/209923
I am beginning to collect again, myself, OP. Personally, I stick with US pre-1933 gold. I wanted my first great coin to be a nice, slabbed $20 gold piece, so I saved up and bought from a reputable dealer. As these coins are quite expensive, I do not see myself being able to purchase more than a few each year. My main focus now is on Indian quarter eagles, which you can definitely get for anywhere from $300-$400 a piece, depending on the grade. If you want to pay a smaller premium over melt and still go with pre-1933 gold, but do not have $2000 to drop, I would then suggest Indian half eagles. You can get the half eagles for a smaller premium over spot vs. the quarter eagle counterparts. For some reason, I just like the little guys, though.
If you are going to pass something down, I would definitely opt for pre-1933 gold. It is just more "special" and the history adds to the numismatic value. I just don't find modern bullion very interesting...
I'm with you on the Pre-33 US Gold, but once you have 1 of each denomination, I found it pretty boring as I wasn't enamored of either a year-set or mint-set. Quickly moved on to a European sovereign-sized search covering all the different rulers. Amazing the variety to be found there, and many nice coins can still be snapped up for a low premium over melt (at least back to the 1800 century in many cases)..
If you want to invest in bullion, stick to the coins with the lowest premiums, because premiums often vanish when bullion runs up and it’s time to sell.
If you want to invest in rare coins, where the bullion value is essentially irrelevant, there are many ways to go. My advice would probably mostly depend on your time horizon, how much effort you want to put into this, and your budget.
One more thought, FWIW. Most seasoned collectors and dealers alive today have focused on relatively common coins in uncommon condition, because that’s where the money was. I suspect that that is no longer a winning strategy, at least for US coins. It’s a long story, but important if you’re approaching coins as an investment.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
MrEureka, your response is interesting. Can you elaborate on your perception of the shift away from conditional rarity? This has been a central feature of the business models of some national dealers.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]