Are Coins a
by George H Ostridore
Most numismatists would reply that if coin dealers had the
answer to these questions they'd all be rich.
Let's face it-your stock broker can't predict if
any specific stocks or the market in general
will go up or down. What makes you think a coin
dealer can predict if a coin will become a good
investment or not? There have been articles
arguing the merits of investing in coins and
there have been articles as rebuttals to these
arguments. Crunch the numbers anyway you like to
support your personal view.
There are stocks that go up and there are stocks
that go down. There are fine art paintings that
increase in price and others that decrease as
tastes change. Well, tastes in coins to be
collected also change.
This is a question that has been asked a lot
over the years. With the advertising that is
seen in almost every medium, you would think the
answer would be a resounding, Yes!
Under the right circumstances and with the
satisfactory background and information, they
can be. Many have made several over the years and
quite often by accident in many cases.
As with most investment markets the rare coin
market moves in cycles where prices rise and
prices fall. Factors that drive the market are
numerous and varied and are similar to those
that drive the gold bullion market. This
correlation with the gold market is down to two
factors: firstly many rare coins are made of
high percentages of pure gold and secondly when
stock markets are in decline investors will seek
alternative, more tangible investments such as
gold or rare coins and collectables in which to
put their money.
Unlike many other investments such as stocks,
oil paintings, real estate investing in rare
coins is affordable for virtually all investors.
The cheapest coins can be picked up for only a
few dollars enabling children to develop a
hobby/interest with their pocket money while at
the same time for the serious investor there are
example that sell for tens or thousands of
Even buying proof sets every year from the Mint
is not necessarily a good investment. In fact,
the past 40-year history is barely a break-even
proposition, as many older sets have declined in
value while a few more recent issues have
The best rule for "investments" is to buy coins at
major coin auctions that are certified and of
the highest grade available for the particular
coin. Take a few examples: In 1998, a
doubled-die cent graded MS-65 RD sold at a major
auction in Florida for $16,500. The same coin
sold in 2006 at another auction for $32,000.
At the high end, they are, if you know what you
are doing. "The Three Graces" is an 1817
gold crown, engraved by William Wyon. The coin,
in "extremely fine" condition, could have been
had in 1972 for $10,400. It came up again in a
Spink auction in March with a top estimate of
$80,000, but it was part of a sale devoted
exclusively to the reign of George III. Buyers
flew in from around the world, and "The Three
Graces" went for $275,000.
At the low end? Your return may be close to
zilch. Those 100-year-old cent pieces, worn and
chipped but lovingly handed down from
grandparents, aren't worth anything. A roll of
Uncirculated pennies you took home from a bank a
half-century ago would fetch not too much more
than the 50 cents you invested. Even gold coins
may not appreciate much, unless they are rare or
in superb condition. Transaction costs are
savage. Buyers and sellers, getting professional
advice, can collectively pay 30% commissions on
any one auction purchase.
The only up side is for lots of appreciation to
occur with lots of downsides. There are many
ways to diversify that would be better.
It depends on what you define as a value
investment. Yes there is the financial side but
I like to see the investment in preserving and
sharing of history, art, political, and cultural
impact of coins. (This is the bulk of my
For thousands of years, there has been evidence
that our ancestors collected coins. It is an
ancient hobby which has survived and been
constantly expanding. A lot may wonder why
collect coins? In this section, I will discuss
the main reasons for coin collecting.
This question has several answers. Just like
each person has their own character, each person
has their own reason to collect them, a lot of
times reflecting their feelings towards a
civilization, ideals and interests. A lot of
psychologists use coins to evaluate the inner
character of people by allowing them to identify
which coins express their feelings. Dark pages
in World History have been aided by coins,
expressing the intentions and feelings of
emperors of the time but also the technology,
culture and beliefs of the people which were
expressed on them. Proof of cultural movements,
the rise of fall of empires have been recorded
on these pieces of invaluable metal.
Coins especially certified by
always be prime investment targets.
The final decision always comes down to your
financial status and knowledge of the
investment. The more you learn the smarter your
result will be.