Top Five US Coins for Investment

[Hurricane4911-migration]

I've sold-off a good part of my collection that I was holding since I was a early pre-teen collector. As a baby boomer, you can guess how many wheat back cents and junk silver I pulled from circulation.

 

Anyway, I'm looking for an opinion from the vast ocean of knowledge here. What do YOU see as the top coins that hold the best position for capital return over say, the next 10 years?

 

My research came up with these 8 candidates:

 

 

[*]1917 Type 1 S.L. Quarter MS 65 or better

1883 Liberty Nickel PF 65 or better

1915 S Buffalo Nickel MS 62 or better

1908 S Indian Cent MS 64 or better

1921 Peace Dollar MS 64 or better

1924 S Peace Dollar MS 64 or better

1907 Indian Half Eagle MS 60 or better

ANY Liberty Quarter Eagle MS 62 or better [*]

 

What are your thoughts on these coins? Can you suggest others?

 

I compiled these eight from various internet sources whose writing was intelligent, lucid and specific. My "series" collections will go to my grandson, I'm looking to acquire some "investment metal"...

 

Thanks in advance for your input.

 

 

 

 

 

 

[e1cnr]

How much do you plan to invest, and will you definitely hold for 10 years?

- I ask if you will be able to diversify and get a few on your list, or just 1.

 

the big wildcard is where will gold be in 10 years? if it is at/over $5K, the last couple will do very well - if it is under $600, not so much

 

but if you want your 'investment' metal related, why not just government gold/silver/platinum - which probably would be the most 'liquid' when someone sells.

[MarkFeld]

Generally speaking, I think the coins listed are too common to offer good investment potential. What would cause them to appreciate in value, which wouldn't also cause many other coin types to do the same? I'm curious as to what was said about those particular coins which caused them to make your list.

 

I freely admit that I don't recommend rare coins for investment. It seems that a large percentage of investors end up losing money. At the same time, collectors who learn about and patiently buy coins that they want or "need" for their collections, tend to do better, financially.

[Nutmeg Coin]

In the $20 Liberty gold series the 1861-O has done well in XF and above, but it is always a temptation to sell as you see large profits, you won't be able to guess the top usually. Premiums on semi-numismatics go through cycles, sometimes they are quite substantial.

 

I had this 1861-O $20, bought as a VF35, had recertified as XF and sold through Teletrade many years ago: http://www.teletrade.com/coins/lot.asp?auction=1257&lot=2049

 

For me the criteria for best potential on coins would be:

 

Large coins with big potential audiences.

 

No problem certified and CAC coins.

 

Key dates or high end for grade.

 

Dates with wide appeal such as civil war issues.

 

Avoid esoteric types of coins and stick with popular classic designs.

[Hurricane4911-migration]

I pulled from a handful of blogs over a short period. The overall theme in choosing these coins are today's prices with an eye towards mintage & disproportionately low census data from PCGS & NGC.

 

It's not simply about the price of bullion. Everyone wants to own something unique as well as beautiful. Stacked up against classic investment vehicles, coins are pretty much down there in the lower levels of returns.

 

For the sake of discussion, let's make a game of it. You have $10,000 to invest, what 5 pieces would you purchase at today's prices?

 

[orifdoc]

These are interesting threads. If anyone REALLY knew which coins were going to be good investments, they sure wouldn't be sharing the information freely in an Internet forum.

 

The real answer is that nobody knows. It's entirely possible that the best US Coins for investment will look something like this:

 

2014 1 oz. Gold Eagle

2013 1 oz. Gold Eagle

2012 1 oz. Gold Eagle

2011 1 oz. Gold Eagle

2010 1 oz. Gold Eagle

 

Or maybe I'm wrong and it will be silver eagles or Platinum. I know that's a snarky answer, but I generally see this the same way as Mark Feld. If you're looking for an investment, you might be better off looking at more traditional areas.

[HCumberdale]

I freely admit that I don't recommend rare coins for investment. It seems that a large percentage of investors end up losing money. At the same time, collectors who learn about and patiently buy coins that they want or "need" for their collections, tend to do better, financially.

 

+1

 

Before investing any of your money in coins, purchase some books on the subject matter from 10, 20, 30, and 40 years ago. Look at what your portfolio would look like at different time periods after your initial "purchase" of the coins the authors recommended, 10, 20, 30 years into the future. I think you will find the market variable and less than secure, and that is being able to look backwards in time.

 

If you want to collect for enjoyment, learn about the series you like, buy quality coins, and you will probably not lose a significant amount of money when it comes time to sell. Perhaps you might even gain a bit. This is a good hobby in my opinion, your net loss over time is certainly going to be less than if you chose golf, strippers, or booze as a hobby But for investment...stick with a good financial planner.

 

Just my 2 cents.

[Eric Hazen]

There are better investment vechicles, be careful.

[AnkurJ]

Over the next 10 years, I feel these coins will have the greatest percentage return.

 

1793 Chain Cent in truly problem free XF or better

1792 Half Disme in Xf or better

Truly problem free Draped $10 Gold in AU or better

Octagonal Pan Pac $50 Commem in AU or better

1793 Half Cent in truly problem free XF or better

[physics-fan3.14]

Extremely high grade specimen strike 1794 Flowing Hair dollars.

 

Sorry, feeling a little troll-ish today. I blame it on the snow and ice, got us southern folk feeling a bit funny.

[Raisethis2]

For $10,000 buy a capped bust $5 gold original, uncleaned and slabbed coin. Put it in a safe and open it in 10 years.

[zboyle04]

finest known examples of any popular series

 

 

[GoldFinger1969]

I'm talking what I hope will be my book but I am going to go with the Saint Gaudens and Liberty Double Eagles.

 

BTW, this is based on my FINANCIAL and HNW Private Bank experience, and not my coin expertise (which is very minimal, in all honesty). I like buying the highest-quality (MS 65-67) coins one can find in those Double Eagles because:

 

(1) I think you see scarcity value appear there, even when there are plenty of coins in the lower MS gradings.

 

(2) I think you will see more $$$ flow into coins and other tangible stuff from newly-minted gazillionaires. All you need is one 20-ish or 30-ish kid from one of these social media companies to make a splash by buying tens of millions of coins -- or maybe paying $20 MM for a single coin (one of the 1933 Saints, if they ever get released, or maybe that 1907 UHR ?) -- and the publicity would take off. You'd have everyone looking for the 'affordable' version. Remember when an unknown geek named Bill Gates bought one of those Porsche 959 experimental sports cars in the late-1980's ? Remember the effect on current and classic Porsche's ? BINGO !!!

 

(3) You can buy Saints at reasonable -- based on absolute $$$ and % -- premiums to bullion value. Haven't done as much work on the Liberty's, maybe someone can chime in.

 

(4) Fixed Supply of Saints/Liberty's + Rising Demand = RISING PRICES !!! Among collectors I know, they may sell bullion coins for a profit or when they need $$$, but not their precious numismatics. Those they want to keep -- until their death -- and then bequeath them to their kids or family.

 

If you have limited resources like I do, then even low-60's Saints/Liberty's should do OK over time, though they won't move as much or as quickly as higher-graded coins (unless there's a quirk that raises the low end more than the high end).

 

Of course, The X Factor in all this is the future interest in coin collecting. Among my young nieces and nephew the interest in collecting coins or baseball cards is zilch, zero, The Big Goose Egg, Empty City, nada. I think folks are more likely to get into coin collecting as adults than baseball cards or other stuff if they never got into it as a youngster because it's a springboard from financial and gold/silver investing. I'm sort of a testament to that.

 

Still, the number of millionaires has gone up almost 20-fold in the last 40 years. It won't do that again in the next 40 years or the next 20, but classic coins with underlying bullion value are a good investment with a floor that can be calculated based on gold/silver prices.

 

 

[A.Phillips]

I freely admit that I don't recommend rare coins for investment. It seems that a large percentage of investors end up losing money. At the same time, collectors who learn about and patiently buy coins that they want or "need" for their collections, tend to do better, financially.

 

+1

 

It takes me 2 years to get those 15 NGC Morgan Dollars, I have a patient to try to get every years and mints of Morgan. I don't do it for an investment, I just do it for my enjoyment (hobby). If the coins' value is dropping dramatic, I still will collecting the coins, though.

[HCumberdale]

(4) Fixed Supply of Saints/Liberty's + Rising Demand = RISING PRICES !!! Among collectors I know, they may sell bullion coins for a profit or when they need $$$, but not their precious numismatics. Those they want to keep -- until their death -- and then bequeath them to their kids or family.

 

I'm not going to critique your post point-by-point but on this statement alone, I must quite strongly offer a rebuttal.

 

Yes, there are fixed number of double eagles, just like there are a fixed number of 1950's Lincoln cents. Fixed number (no matter how small) means virtually nothing. When a series gets hot, (rising demand) certainly prices will rise, but when that series get cold...then what? In numismatics, like anything else there is ebb and flow. You only talk about the upside and ignore the eventual decline. When will the market swing up/down for any given series? You can't know the answers to that question. U.S. Gold coins have long been touted as wonderful investments in blah blah dates with blah blah grade, and a great many people have lost their shirts with them.

 

Most collectors do not buy and hoard like you describe. They upgrade and sell their duplicates to fund new purchases. Even if it were true that collectors held onto their purchases till death, you forget that the people that collected while the numismatic market was at its peak are dying while their kids (my generation) could care less about them and they re-enter the market through dealers and auction companies, to be sold to primarily an older generation of collectors.

 

Young 20-30 somethings (wealthy or otherwise) are not buying rare coins for investment (as a group). They are more focused on crypto currency and the NEW, not the relics of the past. I'll acknowledge I'm an exception to this rule, and I know there are others of us, but we are the exceptions not the rule.

[GoldFinger1969]

HCumber, as a former economist I certainly subscribe to the notion that there are a multitude of variables that can affect prices. And guestimating supply and demand for both a numismatic premium and the underlying bullion price is extremely difficult, to say the least.

 

That said, my belief that you can buy Saints or Liberty's at premiums ranging from 30-300% for most of the years in affordable MS grades is at least reasonable for the average collector. And it's alot less risky than relying on future numismatic premiums for niche coins that might be well-known to the experts but not so the general public, IMO.

 

I would rather buy Liberty's/Saints at 30-300% premiums to underlying bullion value rather than pay 500 - 5,000% premiums for pennies, nickles, dimes, etc. If I was independently wealthy and didn't care about the gains/losses, then maybe I would pay $5,000 for something with a face value of under $1.00 that has bullion value even less than that. At least with Double Eagles I'm buying 1 oz. of gold (or close to it).

 

I freely admit my strategy is not for everyone and maybe even at odds with most professional numismatists and collectors. I'm a conservative investor who looks at things like book value, intrinsic worth, and outdated concepts like that.

 

Ultimately, I've been in the investment business long enough to realize that no 2 people are alike in their choices of investments let alone art or coin collecting. I always tell people who ask me about coin collecting to ask themselves what would happen if the numismatic premium they paid were to shrivel up or even disappear entirely. If it won't change their lifestyle or they really like the coin and would still be OK holding it, I tell them to go for it.

[joes2001]

I would maybe look at cheaper, rare world coins. You might find more value for your dollar. But this area is uncertain, just like everything else. I would get some world gold coins that are graded (before 1950s) because you can get a lot of them for bullion prices, or close to that. You can't say the same for US gold coins, at least ones several decades old, not a few decades. My last advice is maybe invest some of that capital in silver bullion, maybe a little in gold. Silver seems quite cheap and a good investment, especially if you have 10 years to find a good time to sell high.

[MarkFeld]

finest known examples of any popular series

 

 

Finest known or highest graded? Those can be different. And if you are talking about top pop coins, if and when others are made, it can negatively impact values, severely.

[VDB Coins]

What coins will yield the best investment returns over the next 10 years?

 

Vanguard Dividend Growth Index Fund. I hear John Bogle has a few coins rolling around in his pocket.

 

Sorry, but I just think that calling coins "investments" is the path to fool's gold. An investment is something that pays regular and predictable returns in my book, and over the long haul (with enormous exceptions, like 2008!) that has been the stock market. Yes, many coins do pay returns if held for a sufficient time (and if the buying price was right, and the quality [and rarity--see Mark Feld's comments, with which I concur] are there -- but the coin market is cyclical like any other, yet it has not had a major across-the-board drop in many years. When it does, the question will suddenly become "where can I dump some of this stuff and suffer the smallest losses?"

 

None of us have crystal balls ...

 

Best Regards,

 

George

[Nutmeg Coin]

On this Teletrade coin I sold in 2000, what would it have been worth if I had held it?

 

This 1861-O $20, bought as a VF35, had recertified as XF and sold through Teletrade many years ago: http://www.teletrade.com/coins/lot.asp?auction=1257&lot=2049

 

It had a slight scratch, which would affect its value. If GS is an accurate indication, it would be worth many times more than it sold for then.

 

Richard Nachbar for many years has been running ads questioning investment value of certified coins and instead recommending the raw metals due to greater liquidity, etc..

 

The best investment IMO remains a successful self-employed business.

[RWB]

"...best position for capital return over say, the next 10 years?"

 

None. Returns of capital are incidental. Rare coins are not an "investment" they are a hobby or a "speculative venture."

[GoldFinger1969]

What coins will yield the best investment returns over the next 10 years? Vanguard Dividend Growth Index Fund. I hear John Bogle has a few coins rolling around in his pocket. Sorry, but I just think that calling coins "investments" is the path to fool's gold. An investment is something that pays regular and predictable returns in my book, and over the long haul (with enormous exceptions, like 2008!) that has been the stock market. Yes, many coins do pay returns if held for a sufficient time (and if the buying price was right, and the quality [and rarity--see Mark Feld's comments, with which I concur] are there -- but the coin market is cyclical like any other, yet it has not had a major across-the-board drop in many years. When it does, the question will suddenly become "where can I dump some of this stuff and suffer the smallest losses?"

 

100% agree.....you should always look at these as falling to bullion or melt value.

 

Bullion and/or coins do not pay dividends and are entirely dependent on multiple factors that are not fundamental in nature. Collect coins as a hobby, try and 'invest' in coins that will hold their value or appreciate, but under no circumstances confuse your coin collection (even bullion) for a savings account, mutual funds, stocks or bonds. (thumbs u

[GoldFinger1969]

"...best position for capital return over say, the next 10 years?" None. Returns of capital are incidental. Rare coins are not an "investment" they are a hobby or a "speculative venture."

 

Nailed !!! (thumbs u (thumbs u (thumbs u

[CSdot]

I would be looking for high grade examples of odd denominations, or one (or two) year types. Some examples of odd denominations might be twenty cent pieces and three dollar gold. One (or two) year types could be the shield nickels with rays, type I standing lib quarters, high relief Peace dollars and Saints, 1853 quarters and halves with rays, and 1859 Indian cents.

[SkyMan]

The best path to wealth, aside from "picking" wealthy parents, is a diversified portfolio... stocks, bonds, real estate and some precious metals. The pm's (e.g. bullion of your choice) should certainly not be more than, at the outside, 10% of your portfolio. Rare coins, unless you play in the big sandbox, are a fools choice as an investment. Given the aging of the rare coin collector base I also think that prices will be in a long term decline for 95+% of the coins out there.

[Nutmeg Coin]

All the predictions of the decline and fall of numismatics have been exaggerated. Problem and high population coins have been weak and in decline for a while now, though MS65 Morgans, etc., have shown strength at times.

 

I remember lots of notable dealers in the 1990s into 2000s saying that gold was dead, how wrong they were proven!

 

If you bought a large group of MS65 CAC $20 Libertys and Saints, I am sure in the long term there would be significant increases in them, followed by declines.

 

When people say that hard assets and certified coins are lousy investments I say compared to what? Land, only if you are lucky with the right parcel of real estate and are willing to pay the steep taxes. Stocks and bonds? Once again, you have to buy right and sell at the right time. For every winner in every investment, there are usually as many if not more losers.

 

 

[GoldFinger1969]

The best path to wealth, aside from "picking" wealthy parents, is a diversified portfolio... stocks, bonds, real estate and some precious metals.

 

Totally agree...of course, I work in the field. (thumbs u

 

The pm's (e.g. bullion of your choice) should certainly not be more than, at the outside, 10% of your portfolio. Rare coins, unless you play in the big sandbox, are a fools choice as an investment.

 

Ditto ! (thumbs u

 

 

Given the aging of the rare coin collector base I also think that prices will be in a long term decline for 95+% of the coins out there.

 

That IS an interesting forecast, I wonder if there have been some in-depth analyses along this line in numismatic journals or other academic papers ?

 

I would think that the number of members as well as the demographic make-up for the various coin/numismatic associations should also be very telling.

[BillJones]

What is a "1907 Indian half eagle?"

 

The series started in 1908.

[CSdot]

What is a "1907 Indian half eagle?"

 

The series started in 1908.

 

That would be rare.

[Hurricane4911-migration]

Responses and opinions are as wide and varied as the "legacy" financial markets. One thing for certain, nothing beats a well diversified portfolio where hard-assets collector coins, bullion, and memorabilia should occupy one of the smallest portions of your portfolio.

 

Enthusiasm is what sets collectors apart from investors. We get to enjoy what we buy be it sparking some childhood memory or the amazing artwork on some US coinage. As a child adding a new penny to my Whitman folder was a big deal.

 

The value of St. Gauden's coins seem to endure through good and bad times. Yes it's partially driven by the prevailing price of gold, but the coin is synonymous with US pride, and strength. A few of the items I gleaned in my OP have an underlying story like the 1883 no-cents or 1917 SL quarter, and I like that.. Others are victims to low mintage based on some politics of economic event at the time.

 

This is a great forum with knowledgeable and passionate contributors, BTW...I already bought the proof 1883 no-cents (PF65). And there is the 3 day Heritage signature auction next week. I hope to add 1 or 2 pieces there if my wife doesn't shoot me first.