Which is more likely to retain its value?

DustyCoinbox · February 22, 2008 4:17AM

If I don't care about appreciation, but just want something to store purchasing power, which option is more likely to hold its value (and why do you think so)?

1. Bullion

2. Bullion coins (Eagles, Maple Leaves, Buffalos, etc.)

3. Old Bullion coins that have become "collectible" (Liberty 20 pieces, Saints, etc.)

4. Base metal coins in circulated condition

5. Base metal coins that are rare (1918/7 Buffalo Nickels, etc.)

6. Base metal coins in pristine condition (MS66 Buffalos, etc.)

(I realize there is probably no one right answer to this, but I am curious to see what other coins collectors/dealers/numismatists think)

ambro51 · February 22, 2008 4:43AM

Your only sure bet are CD's

roadrunner · February 22, 2008 4:44AM

I think you have them ranked fairly well as is. Right now bullion coins are swallowing up the premiums of semi-numismatic gold coins.
So I'd go with the bullion gold coins. Don't like the idea of assaying bars or proving whether a gold bar is legit all the way through the core.

roadrunner

bobbly · February 22, 2008 4:45AM

Rule #1 for investing in coins: Key date coins make better investments. (buying 1 $10,000 is a better investment than buying 10 $1,000 coins.)

tightbudget · February 22, 2008 4:56AM

Hard to tell, but I'm with number 3 or 5.

slipgate · February 22, 2008 5:00AM

Gold is WAY too high right now. I would not invest anything in precious metals long-term. Precious metals have never been good for anything but short-term investing anyway. If you are looking for capital preservation, like someone said, CDs are a good choice.

As the economy gets worse and worse, you be happy you have some cash. If Hitlery gets in, you can flush any investments down the drain.

Wolf359 · February 22, 2008 5:00AM

<< Rule #1 for investing in coins: Key date coins make better investments. (buying 1 $10,000 is a better investment than buying 10 $1,000 coins.) >>

Not always true!

Many "key date" coins have lost value because new ones are made in the pops.

ziggy29 · February 22, 2008 5:06AM

High bullion prices make semi-key date numismatic gold a much better buy today. Their premiums relative to melt are shrinking sharply. Even if gold prices retreat, I would expect these coins to regain some of their numismatic premium (i.e. not fall nearly as hard as their widget-date brethren).

ricko · February 22, 2008 5:09AM

"Precious metals have never been good for anything but short-term investing anyway."

Not totally true.... I have held gold (a lot) purchased at $350-$400.... consciously purchased because I believed it would increase in value.
It has. So, unless you consider 12-14 years short term, I would say my profit is considerable - long term. Cheers, RickO

BigRed · February 22, 2008 5:17AM

Remember guys he said for "storing purchasing power" and not investing.

ttown · February 22, 2008 5:24AM

<< Gold is WAY too high right now. I would not invest anything in precious metals long-term. Precious metals have never been good for anything but short-term investing anyway. If you are looking for capital preservation, like someone said, CDs are a good choice.

As the economy gets worse and worse, you be happy you have some cash. If Hitlery gets in, you can flush any investments down the drain. >>

Good for anything just used since before Christ is all. The goverments of the world sure like it, ever hear of the "Gold Standard". It provided stabiliy. The mess we're in now is the result of not having a limiting factor in fiat paper.

RedTiger · February 22, 2008 5:32AM

Nickel rolls at face value. If the ban on melting is ever lifted, and likely it eventually will, then a person has a 40% profit, plus whatever inflation increase in the price of the metal. Downside is only on lost interest, they will likely never be demonetized in the U. S.

The negatives are storage space, and weight. $1000 of nickels will weigh a bit over 200 pounds ($4.55 of nickels per pound for uncirculated nickels). So for $10000 in face value a person is looking at a literal ton of nickels! Compare that to $10000 for ten to twelve one ounce gold coins and a person can see the portability and storage issues. For pure monetary considerations, nickels or pre-1982 cents are the way to go. The weight and storage issues are even worse with cents.

gecko109 · February 22, 2008 5:37AM

<< Nickel rolls at face value. If the ban on melting is ever lifted, and likely it eventually will, then a person has a 40% profit, plus whatever inflation increase in the price of the metal. Downside is only on lost interest, they will likely never be demonetized in the U. S.

The negatives are storage space, and weight. $1000 of nickels will weigh a bit over 200 pounds ($4.55 of nickels per pound for uncirculated nickels). So for $10000 in face value a person is looking at a literal ton of nickels! Compare that to $10000 for ten to twelve one ounce gold coins and a person can see the portability and storage issues. For pure monetary considerations, nickels or pre-1982 cents are the way to go. The weight and storage issues are even worse with cents. >>

This is right on the money! Walk into your bank with $1,000 and you can walk out with almost $1,400 worth of metal. In 1965 and '66, it was just about the same thing concerning junk silver. Not too much of a stretch to imagine selling rolls of nickels for 5-8x face 20 years in the future.

PerryHall · February 22, 2008 5:43AM

Saints and Liberty double eagles---the best of both worlds---both bullion and numismatic collectible.

BECOKA · February 22, 2008 6:03AM

Never put all your eggs in one basket.

mix it up a little. BTW with the significant increase in bullion pricing you never know when there will be a blow and the market drops by half.

gecko109 · February 22, 2008 6:05AM

<< Never put all your eggs in one basket.

mix it up a little. BTW with the significant increase in bullion pricing you never know when there will be a blow and the market drops by half. >>

But could you ever wake up in the morning and discover that your $100 bank box of nickels is worth $50?

stockwiz · February 22, 2008 7:26AM

bullion palladium, or bullion silver.

coinpage · February 22, 2008 7:55AM

<< bullion palladium, or bullion silver. >>

agree at 99.99 fine

PerryHall · February 22, 2008 8:05AM

<< 

<< bullion palladium, or bullion silver. >>

agree at 99.99 fine >>

Where can you find 9999 silver? All I ever see is 999 silver.

Phoenix21 · February 22, 2008 8:10AM

Unfortunatly, there is no real or correct answer for this. Any and all of them could drop and plummet tommorrow, depends on the market. Bullion seems to be doing well right now, but still there you are taking a gamble. I think rare coins (like from $500-2K) might be good, except there still you don't know. I'd say collect what is appealing to you, and if you get a profit in the long run, then an added bonus.

Phoenix

cladking · February 22, 2008 8:21AM

<< Unfortunatly, there is no real or correct answer for this. Any and all of them could drop and plummet tommorrow, depends on the market. Bullion seems to be doing well right now, but still there you are taking a gamble. I think rare coins (like from $500-2K) might be good, except there still you don't know. I'd say collect what is appealing to you, and if you get a profit in the long run, then an added bonus.

Phoenix

>>

Exactly.

This is just pure speculation. Generally the steadiest coins are the ultra rarities but
this is because they are in strong hands that don't have to sell in bad times.

I think the best coins for retaining their value are precious metal coins That had a
numistmatic premium at lower prices. This premium should reemerge if prices drop.

The risk with pennies and nickels is that if you have to sell at face value it might be
exceedingly difficult tpo find a buyer.

There are lots of coins that are effectively risk free but you can't locate them in the
kind of quantities to be meaningful.

Converting all your money to gem BU Swiss 20R coins from the '70's is impossible if
you have more than a few dollars.

DustyCoinbox · February 22, 2008 8:44AM

There is no correct answer, IMHO. FWIW, here are some of my thoughts:

The listed items' values are determined by differing amounts of the following value types:

1. Underlying metal value - basically the spot price of the metal composing the item. Usually (but not always) rises when times are good due to industrial demand and/or demand pull inflation (too many dollars (or Yen, Yuan!) chasing the rings, coins or shiny things out there and falls when times are bad.

2. Numismatic value - the appeal of the coin to the numismatic community for its desirability in collections, articles of study, museum exhibits, etc. May rise when time are good for demand pull inflation like number 1, but probably does not follow the economic cycle so closely as the underlying metal value.

3. Economic/political risk hedge value - the value that certain metals, the classic one being gold of course, have for storing wealth in times of economic uncertainty. This type of value tends to move in the opposite direction of the economy, since people are hedning their risk to other financial assets (currency,stocks,financial instruments, etc) heading south.

4. Face value - basically a wash for the coins and zip for bullion

So,

Something like bullion is almost a pure play on (1) underlying metal value and (3) economic hedge value. It will do best when there is uncertainty coupled with industrial demand - like now with China's economy industrializing rapidly, but with war(s) and terrorist issues going on.

Ditto modern bullion coins. They add (4) face value, but it doesnt matter much, except that it adds some liquidity - harder to fake (economically anyway).

Old gold coins add (2) numismatic value to the (1), (3) & (4) mix, so they might apprciate with bullion/bullion coins but may not follow the economic cyle as closely because the demand for them by collectors and numismatists may be more slightly more steady than

Base metal rarities have more (2) numismatic value than any of the other components, so these would follow the economy but be more likely to move with the supply/demand for the particular coin.

Base metal non-rare coins would likely include some (2) numismatic value but not move so strongly based on population for a particular issue. As some posters pointed out, even these may vary in value if the underlying base metal (say nickel for example) increases past the face value or the numismatic value.

What conclusion? Maybe each of these will be more/less price stable depending on the environment, demand for the issue, etc., but hard to pick one as a "most" stable store for wealth. Maybe those advocating holding more than one type of these assets are correct...

coinpage · February 22, 2008 9:07AM

<< 

<< 

<< bullion palladium, or bullion silver. >>

agree at 99.99 fine >>

Where can you find 9999 silver? All I ever see is 999 silver. >>

sorry, you're right I meant .999 fine

Which is more likely to retain its value?

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