Investment Coins Vs. Collector Coins

[WinstonWare]

I sometimes read references to Investment coins and Collector coins. As I understand it, Investment coins are supposed to be over some dollar figure (was it $2,000) and Collector coins are all the coins under that figure. Is that correct?

 

My real question is, “Why are these coins referred to as Investor coins?” Is it because they are expensive, that the coins are expected to appreciate more rapidly, some combination, or something in addition that I haven’t taken into account?

 

Assuming that we are discussing problem free coins, is it your belief that more expensive coins will appreciate more rapidly e.g. an 1810 CBH in AU-55 will appreciate at a higher percentage than an 1810 CBH in VF-20 all things being equal?

 

Thanks for your thoughts!

[MunkyMan95]

I sometimes read references to Investment coins and Collector coins. As I understand it, Investment coins are supposed to be over some dollar figure (was it $2,000) and Collector coins are all the coins under that figure. Is that correct?

 

No.

 

My real question is, “Why are these coins referred to as Investor coins?” Is it because they are expensive, that the coins are expected to appreciate more rapidly, some combination, or something in addition that I haven’t taken into account?

 

Some combination of being expensive and the thought that if you spend more money, profits will be greater.

 

Assuming that we are discussing problem free coins, is it your belief that more expensive coins will appreciate more rapidly e.g. an 1810 CBH in AU-55 will appreciate at a higher percentage than an 1810 CBH in VF-20 all things being equal?

 

I would say so, in a perfect world. And this would be ONLY for problem-free coins. An original VF20 and a dipped-out AU55 would be a totally different scenario.

[WinstonWare]

No.

 

I appreciate that elaborate answer

[MunkyMan95]

Okay, I'll elaborate.

 

One collection in particular came to mind. TDN's Trade Dollars. That is a TRUE collection. He went for the highest graded examples, beautiful coins, and the price was no doubt very high. I'm sure he could sell them for multiples what he paid, but he chooses not to because they are true collector coins, and most well over $2,000.

 

And like SageRad's gold coin he posted the other day. Over $2,000 but a beautiful collector coin. Meant to be enjoyed, not held onto and flipped later.

 

And, some coins under $2,000 could be considered investor coins. Check out the 20th anniversary SAE sets! People buying up all they can because they feel that the price can only go up.

 

Better?

[WinstonWare]

I think I see where you are going. Yeah better, thanks

[SkyMan]

I would say it has more to do with philosophy... is the coin one you are planning to flip in a short period of time for a profit for example. I've bought some coins for an investment and had my head handed to me on a platter, and I've bought others as a "collector's piece" and made a healthy chunk of change on them.

[Keleum]

Are you also thinking of collection buillion? Precious metals. Seems that wouldn't be a bad medium term investment these days.

[TomB]

1) No.

2) Marketing.

3) No.

[WinstonWare]

Hum, so there isn’t really a definition of “Investment Coins,” or have I just defined it incorrectly. I guess we are talking about question 1

[TomB]

I believe the term you are using is one associated with marketing and not numismatics.

[WoodenJefferson]

Winston, I never figured a price/value, high/low to be associated with either.

 

To me, an Investment Coin is something you purchase with intentions of selling off at one point in time at more than what you originally paid for it...a profitable one but pure speculation based on indicators.

 

A Collector Coin is something you purchase with intentions of keeping, to add to your collection or kept until something better comes along. Even then, this collector coin could be sold at a profit so it has unintentionally morphed into an Investment Coin.

 

Everything mentioned here has to do with buying at the right price so it increases in value exponentially. However, I know some collectors where the value is second to the beauty and the pride in owning a particular coin. It’s all in the matter of how you perceive where a purchased coin actually falls into, to each his own.

[WinstonWare]

Thanks. Maybe too many magazines & too much time to read them

 

 

I apologize in advance for my childish joke but it’s Friday and it is a little funny

[michael]

think of it this way

 

investor coins are coins that when you break them out of their investor pricing service holders they are worth less in fact far less in demand and marketability hence value AND BOTTOM LINE WHEN YOU BREAK A COIN OUT OF ITS INVESTOR PRICING SERVICE SLAB AND IT IS WORTH MUCH much less in terms of LIQUID CASH VALUE AS WHEN THE COIN WAS SLABBED

then it is an investor and not a collector coin

 

contrary to what most all of the stooges tell you on the pcgs forums in regards to rarified plastic holders and the common coins with stratisphere high graded GA-GA grade coins contained therein

 

 

get it

 

investor vs collector coins have nothing to do with cash value of the coin.... NOW OF COURSE ONCE YOU GET INTO MANY THOUSANDS OF DOLLARS TO HUNDREDS OF THOUSANDS OF DOLLARS OF COURSE MORE DECISIONS OTHER THAN COLLECTING COME INTO PLAY OF COURSE as with any high priced luxury item

[WinstonWare]

Yeah I think I got it. Thanks guys

[rrantique]

Thanks. Maybe too many magazines & too much time to read them

 

 

 

[BillJones]

It is interesting to see this “investment coin” vs. “collector coin” crop up again. The term was thrown around a lot in the late 1980s. The so-called “investment experts” told perspective coin buyers that there were “collector grade coins” and “investor grade coins.” The whole thing was (is) a load of *spoon*.

 

Think about it. Where does a collectable coin derive its long term value? Its value comes from what collectors are willing to pay for it for the enjoyment of owning it. Coins do not earn interest like bonds and CDs, and they are not property rights, like stock, that give you the right to share in the business fortunes of a company. They are pieces of medal that give some people pleasure.

 

If a group of coins have had their prices driven beyond the levels where collectors are willing to support the market, from where does the demand for these coins come? The short term answer is for trades between speculators who think that prices for these coins will continue to rise. In fact all these guys are doing is playing the “bigger fool theory.” They are simply trading among themselves. When a group stops buying, or when a particularly large player decides to cash in, the market “adjustment” can be catastrophic. I’ve seen this happen three for four times since I became a collector more than 45 years ago. Those who were foolish enough not to heed the warnings from those who have collectors and dealers for a long time do so at their financial peril.

 

There are no such things as “investment coins” that have no collector base. They would be best called “speculator coins.” People who buy from such marketing campaigns would do well to find a seat out of that market before the music stops.

 

I’ve gone on long enough here, but if there is interest I could tell you some things about what constitutes a “great investment coin.” It will probably run contrary to what you might think.

[WinstonWare]

I’m always interested. I’m going to be away from my computer for a few hours but don’t take that as a sign of disinterest. I’ll definitely be checking back in on this thread. Thanks for the nice response.

[MikeKing]

investor coin:

 

investment advisor pays 1000 for the coin, you buy it for 2000, he profits by 1000.

[BillJones]

Investor coin = Just enough of them around so that a marketer can get his hands on quantities large enough so that he can "make" a nice group at the Third Party Grading services, yet scarce enough so that some "wise guy" will not show up with a roll or bag of them to dump on the market.

 

Botton line - if coin is really scarce and there are lots of true collectors around who want it, it's not an "investor's coin" because the marketing people can't get a large enough supply to fuel their promotion. What they need is something that many collectors don't hold to for long periods with "low mintage" like 10,000 or less but high survival rates.

[WinstonWare]

Thanks again guys. Appreciate all the thoughts and replies

[Houston Investor]

I would consider investor coins to be material graded MS 64 and up.

 

For inventory purposes I refer to collector coins as coins with an inventory value (cost) under $10 - which are raw and can be any grade. They simply are not itemized (inventory excel spreadseet like coins and currency over $10 and are kept in a respecitve "inventory pool." I usually have several binders of these (in 2x2;s) at shows in addition to my other inventory. I will not take up more than half a case with this stuff (keep inside my glass cases - security reasons) and keep excess hidden. A small to mid size 3 ring binder will fit inside your case and yhou can take one page of 20 coins out and set up on top the binder - makes a neat display. There are many raw coins in these binders over $10 too - USA, World, World Gold. Slabs are stacked up in another case and the raw coins share a case with the currency (stacked up). If a real buying customer is looking at this stuff, then I will let him look at the other stuff too. What I want to avoid is the guy taking a long time to look at this stuff, then not buy anything. Recently, I purged everything below $100 off my ebay site (tired of long lines at post office) but have plenty of inventory items under $100 (especially slabs) for shows.

 

I do both coins and currency - my inventory of quality Investment Grade US Currency is pretty much well 100% sold out and replacement would be much more expensive than what a lot of it sold for. I do have a lot of quality world currency but sale of this stuff is slow at best. I can remember circa 1997 maybe finding 3 or 4 large sized USA Nationals at shows in Gem CU at $250 to $300 each (which when CGA first came out I had them graded, sold them off and cleaned up big time, then taking the money and buying a ton of MS 64 saints in 2001 at $450 each when gold was at its cheapest) - now you can not even touch this stuff (Gem USA NBN's) for under $1500 providing you can find it. I remember buying Gem CU Nationals in 1997 raw (there were no TPG currency services then) and then some ignorant coin collector trying to argue with me about price on an ngc vs pcgs coin on a $25 item.

 

What I am saying is a lot of the investment game is not necessarily some ideal grade but buying stuff when it is cheap, selling it for a nice profit, and then investing in something else you know is cheap or has a lot of upside. Some people play the crackout game - I play the investment game.

[DaveG]

Bill Jones offered some excellent perspective on "collector coins" vs. "investor coins".

 

Another example from around the same time period is that "collectors" were often advised to buy the grade just below a big price jump. For example, an MS-63 might be priced at $400, an MS-64 might be priced at $600 and an MS-65 might be priced at $1200.

 

So, a "collector" would go for an MS-64 at a 50% premium to an MS-63, and would avoid the MS-65 at a 200% premium to an MS-63. As a result, the MS-65 coins would then be marketed to "investors" as "investment quality coins."