U.S. Coin Price Guide

Coin Collecting

Buy Coin Supplies

Are Coins a Good Investment
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 dollars.

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 appreciated significantly.

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 1955 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 pattern 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 collection).

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.

Remember that Key Date Coins especially certified by PCGS or NGC should 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.


? 1992-2018 DC2NET?, Inc. All Rights Reserved