Investing your coins?

[moneyhoney]

Some collectors use their coins as an investment...do you think it is worth the time? well, what do you think about it?

[DaveG]

I don't consider coins to be an investment.

 

I consider numismatics to be my hobby.

 

That being said, I'm always happy when I can sell a coin for more than I paid for it.

[JJSingleton]

I have always considered collecting a hobby. As a general rule I use only fun money to buy coins. I do own a few coins that I cannot ignore the fact that they are worth considerable money, but I do not see them as an investment. I expect to make money off of investments and I do not expect that of my coins. I do however recognize that my collection does have value and as such I do view the collection as an asset.

[RWB]

No. If making money is your goal, better to open a place selling bad coffee at absurdly high prices.

[coinman_23885]

If you are asking from a pure investment standpoint, I would advise against it. Coins typically don't appreciate more than the rate of inflation, and even those of us who are able to beat the rate of inflation don't make as much as we could with other investments/securities. With this said, I see coins as a hobby, but think it would be foolish to completely ignore the financial/investment end, but I realize that the latter is only secondary.

[nk1nk]

Coin collecting absolutely IS an investment............ a bad investment!!!! monetarily speaking that is.

 

Nick

[Old Pueblo]

Coin collecting does have all the symptoms of investing.

Probably falls under hard asset in a investment portfolio.

Capital spent on items of value

Possibility of appreciation or loss

Robust Market where assets change hands

Weak markets , strong markets

Historical long term appreciation (time value of money, so to speak)

 

I like to think of coin collecting as a hybrid investment hobby that does hold market relative value.

The value moves as market dictates, but a Double Eagle has never been worth zero. Even a 1909 S VDB is still worth a penny. That's better than Enron Stock.

I keep it in the fun money high risk percentage of 10% or less (Includes precious metals).

So, hypothetically, if I invest 20000.00 per year, 2000.00 plus or minus can comfortably be invested in my coin hobby/habit/compulsion without much impact on my investment objective. Plus it keeps me away from the dog tracks!

I do include my collection as part of my portfolio, but in the hard asset, high risk class. As long as I keep the pie balanced I feel....comfortable. My wife on the other hand?

 

If the 25th Anniversary Silver Eagle sets not been so kind to me, I would say I have loss small money. In return I have made friends, learn much about this hobby, enjoyed some really nice looking coins, sharpened my novice numismatic skills, and above all (with Mark's help), learned to be patient. This has been WAY more fun than I had when I bought Jones Soda Stock

 

 

OP

 

 

 

 

 

[World Colonial]

Like any other field, I would expect most who pursue coins as "investments" to lose money especially adjusted for price changes.

[AnkurJ]

I posted this ATS two years ago:

 

Many people say that coin collecting should not be viewed as an investment, but a hobby. I agree with this but to a certain extent. I personally love the coins I have, and enjoy the aspect of collecting. From meeting people, talking coins, and completing sets, I have a lot of fun doing it. I have spent a good deal of money on some of the coins I have. Some have been bad purchases, while others have been good purchases. I think part of being a collector is realizing the mistakes you have made, and moving on, even if it is at a small loss or minimal profit. I have sold a few coins at a loss, and have moved on. I'm not talking about loss in thousands of dollars, more like a few hundred at most.

 

When the investment discussion comes in, things can get a little tricky. Personally, I am hoping to hold on to my collection for many years, and plan to pass it down to my kids. Long term I hope they keep it in the family as heirlooms, and if they need the money or are in a jam, sell them. But along with that, my hope is that the coins I have purchased will AT LEAST retain their value. Based on the history of numismatics, which has been a hobby since the 1800's, the majority of coins have gone up in value. My collection consists mostly of coins from the late 1700's and 1800's in problem free condition. The majority of my coins are CAC'd for the liquidity CAC creates.

 

Unless the floor drops out on coin collecting, and people just stop, I cant see that quality early american coinage will drop to very low levels. So while I am not buying and selling as an investment hoping for 200% returns, I am hoping the coins I have will keep their value or go up a little bit over the next 40-50 years. For those collectors who have been at this for a long time, what thoughts do you have on this? As collectors putting time and money in this hobby, can we expect our quality coins will retain their value based on historical trends?

 

What I will say today is this: Buy true rarities in decent shape, and you can't go wrong. Have a dealer mentor who will guide you in the right direction, not rob you blind. If you aren't sure who to go to, read the boards and it will be easy to find out. Most importantly....BE PATIENT! The worst buys you can make are those that are done in haste.

 

If you buy common coins or problem coins, I wish you the best of luck getting your money back over the years.

At the end of the day, Education is key.

 

Ankur

[newprepper]

What are your thoughts MH?

[DaveG]

One thing I always keep in mind is the relatively wide spread between the price I pay when I buy a coin and the price I get when I sell a coin.

 

To my mind, something that has to increase in price about 15% (or more) before I can achieve break-even when I sell it (and doesn't produce any income during the potentially multi-year holding period) is not one of my better investment choices (to put it mildly)!

 

On the other hand, I get a huge amount of psychic satisfaction from owning (and looking at) a really nice coin.

[mtnstyne]

Is buying a Picaso an investment or an art collection?

 

Only a few people can afford the Picasso, the rest of us have art on the wall that we enjoy to look at.

 

[mumu]

If you go down that road, youll end up being one of those angry guys when your coin ONLY goes up 1000$ in a year's time. That's no fun.

[physics-fan3.14]

The thing is - if you approach your collection as an investment, you will be frustrated. But if you focus on buying quality, original, eye appealing, desirable coins, you will find that these coins are always in demand. These coins will tend to appreciate more than straight "investment" coins.

[cpm9ball]

The thing is - if you approach your collection as an investment, you will be frustrated. But if you focus on buying quality, original, eye appealing, desirable coins, you will find that these coins are always in demand. These coins will tend to appreciate more than straight "investment" coins.

 

Jason, I don't think the OP cares about buying coins.

 

Chris

[moneyhoney]

Well, after reading the posts, I think I can say it's a "hybrid investment". Keep some for collection sakes and sell some. I think I shouldnt have used the term "investment" or should I? I am thinking along the lines of selling the ones that I can get the most cash for and keeping the ones that are more rare coins.

 

Of course, if I have a coin that is very rare, I would keep it just because I would have a coin that only a few might have. However, if the price is right I would consider selling it.

 

It seems that most collectors like to hang on to that "one-of-a-kind" just to be the one person to own it.

 

Right now I am not concerned with buying to add to my collection. I am more concerned of getting rid of some that I have.

 

My dad kept Kennedy's half-dollars to pass down to the grandkids, think that one day they would be valuable. But mostly, they are just keepsakes.

 

I dont intend to keep these hoards of Lincoln cents.

Having mention that about Lincoln cents, how would you value them? I have some that are worth more than the face value. I checked with cointrackers, but it appears that isnt a very popular site among collectors in this forum.

 

Gee, hope I didnt confuse anybody...

[DaveG]

moneyhoney,

 

Lincoln cents are valued the same way any other coin is valued: first you grade the coin and then you find out what the people you want to sell to pay for a specific coin in a specific grade.

 

A retail price guide may tell you that, for example, a 1985 Lincoln in MS-65 should sell for $5.00, but you may find out that dealers already have all the MS-65 1985 Lincolns they want and so do other collectors, so no one will buy your coin.

 

As a result, although the retail price guide says $5.00, the "real" price of your coin is 1 cent.

 

This is part of the difficulty of investing in coins - there has to be demand for your coins when you want to sell.

[AstroTrain]

Coin collecting should be a hobby first and an investment in a far second. Collect because you love it. Buy smart and years down the road maybe you make a few dollars. Personally I plan on my son having deal with selling my collection, so in a way its an investment in his future, because I know I'm leaving him something with real value.

[DaveG]

moneyhoney,

 

I took a look at cointrackers.com and recommend that you not rely on the prices they show.

 

For example, they show a "numismatic value" for the 1985 Lincoln cent of between 10 cents and 35 cents.

 

In reality, I don't think there's a market for circulated 1985 cents. I think that collectors who want them get their examples from Mint and Proof sets, or else they get rolls of uncirculated coins from banks (they either got them in 1985 or buy them from people who did).

 

The real collector market for 1985 cents is for very high grade uncirculated cents that have been graded (slabbed) by PCGS or NGC.

 

There really isn't a collector market for 1985 cents that have been taken from circulation.

[J3_Dog]

I have just started collecting some Kennedys. I have made the banks aware, so that they can save them for me.

I pick through the nicer ones, and hand the others out to kids.

I don't have, nor can I afford the truly high priced gems. I do have some nice ones though.

Jim

[Crohnos01]

I can't argue with any of the opinions expressed about coins being a lousy investment and they certainly are not where I put the bulk of my investment dollars. However, by the same token, let's say you have some discretionary income that you don't need right away. For purposes of ease, let's say you have $1000.00 to do something with. Of course you could drop it into a IRA but then let's say you are 20 years from retirement and 5 years from now you want that $1000. You can't get it from your IRA without losing a ton in penalties and fees. You could invest in a CD, which in today's economic climate will net you a fraction of a percent interest unless again you tie the money up for at least 10 to 20 years... Again, you can't access the money early without taking a hit. You could drop the money in a savings account and get that .01% interest due again to the current economic climate. Or, assuming you are a collector, know something about what to buy, you could buy a rare or semi rare coin knowing you could sell it at the five year mark if you have to and, yes take a loss especially against inflation, but I would submit that the enjoyment ( at least to me) is worth more than the meager .01% interest which is also going to lose against inflation. Personally, I say why not "invest" in coins as a liquid asset? I don't see a lot out there that will do better (or worse) against inflation for small discretionary income amounts.

 

I took a state licensing board test for engineering a while back and part of the questions had to do with economics where you had to calculate how much to invest ,monthly at 6% interest to have a million dollars in 10 years for example. My question wasn't how much to invest monthly, but where to find that investment making 6% interest!

[chinesecoinchaser-migratio]

It depends.

 

There are many facets of an investment.

 

You need to think about future supply/demand. I always think that buying US coins are a poor future investment, besides the exceptional examples. This is due to the small amount of young collectors and the decline of the popularity of coin collecting in the US. This is part of the reason why I collect Chinese (pre-1949) silver coins. Huge potential future market.

[moneyhoney]

Another great piece of advice DaveG...how right you are

 

 

There are also a lot of DDO, DDR, and what have you....out there too...

if you ask me...it works both ways..but just have to try.....

 

Thanks

[moneyhoney]

Exactly!!!!

 

 

[moneyhoney]

Decline? that leaves more for the serious minded collectors....

[moneyhoney]

DaveG...that gives me an idea or a question.....

 

My question is aoubt copper coins

 

Illegal to melt down copper cents...so where do manufacturers get their copper to use in products?

 

 

Based on the statement you made about the value of coins and the availability of graded 1985 coins, this may be true for all coins except those "rare" coins......

 

what do collectors buy at coins shows? Just coins to complete their collections, other than partying?

 

 

[DaveG]

moneyhoney,

 

Industrial users get their copper from newly mined supplies and recyclers (including the thieves who take copper pipes out of unoccupied houses).

 

I wouldn't say "just", but yes, collectors at shows buy coins to complete their collections, sell coins they don't want anymore, buy books on coins and talk to their friends.

[moneyhoney]

oooh...so is the government trying to appease the mining companies while the consumers continue to hoard these copper cents?

 

The new law in North Carolina is when dealers buy copper they have to make a record of who they got it from, address, etc. I am sure it has to be reported to the authorities also.

 

sounds like a good show to meet friends and chat...

the Penny Lady seems to do very well with her pennies...sure would like to know how she is so profitable, any idea?

 

What is her strategy?

[DaveG]

moneyhoney,

 

I doubt the government is trying to appease any copper mining companies.

 

There's very little reason for individuals to hoard copper cents, although I'm sure that some dummies do. Think about it - the copper thieves sell their stolen copper (or honest people sell their salvaged copper) the same day they get it. A business is all about cash flow. How much cash flow do you get out of hundreds of pounds of copper cents sitting in your basement?

 

I'm sure the copper hoarders will say that copper prices are going to go sky high "someday soon". I wish them luck with that.

 

I'm sure that The Penny Lady's business is profitable for the same reason that any coin business (or any other business) is profitable: she buys inventory that her customers want to buy and she sells her inventory for more than she paid for it.

[moneyhoney]

I dont have to buy inventory, I have my own right here...

 

So is it wise to sell my copper coins by the pound (after I find out the weight of one coins)? I could multiply that by the pounds that I have and that would give me the "spot price" of the entire hoard? Did I get that right?