Do I Have To Buy The Best Quality Coins To Make Money

Do I Have To Buy The Best Quality Coins To Make Money

Buy quality! Buy quality! Buy quality! That's all you​ hears these days when you​ are considering rare coins as​ an​ investment. First,​ are you​ really buying coins as​ an​ investment,​ or​ merely for the​ pleasure of​ owning a​ piece of​ history? That is​ sometimes the​ real dilemma for many collectors,​ or​ is​ it​ investors? Everybody wants to​ make sure that their investment is​ protected,​ but there are no guarantees,​ especially in​ rare coins. in​ fact,​ some rare coins take years to​ appreciate to​ the​ point of​ being able to​ sell it​ profitably.

Hey,​ I would love to​ be able to​ plunk down $100,​000 for a​ 1919-s Standing Liberty Quarter in​ MS67 condition certified by PCGS. There is​ only one coin with this date certified by PCGS as​ of​ February 7th so it​ is​ the​ finest available. But not many of​ us have that luxury. I don't,​ and I suspect you​ do not either. It's hard to​ comprehend paying more for a​ single coin than my first house cost. And while the​ rarest and finest of​ all rare coins have reached stratospheric prices,​ what does this leave the​ rest of​ us? Not much,​ unless you​ are willing to​ do a​ little work.

So if​ my interest is​ in​ rare coins as​ an​ investment,​ what do I do? Well,​ there are many other coins and options you​ can choose. First,​ let's review what drives the​ price of​ a​ coin.

1. Demand. Demand perhaps is​ the​ biggest driver of​ price. a​ clear example of​ this is​ the​ 1909 S VDB with a​ mintage of​ 484,​000 and an​ estimated retail value of​ $720.00 in​ G4 and $7,​500 in​ MS65 vs. an​ 1879 Shield Nickel. the​ Shield Nickel had a​ mintage of​ only 29,​100 yet the​ estimated retail value of​ a​ G4 is​ only $415 while the​ MS65 example is​ $1,​950. to​ further illustrate this point,​ PCGS has certified 703 MS65 Red 1909 S VDB cents and only 27 MS65 Shield Nickels. How many Shield Nickel collectors do you​ know vs. Lincoln Cent collectors?
2. Scarcity. Generally speaking,​ putting demand aside,​ the​ more scare/rare a​ coin,​ the​ higher its value. This is​ usually very true,​ especially when comparing dates within the​ same series. Scarcity should not be confused with overall mintage. During the​ silver booms,​ many,​ many silver coins were melted for there bullion content. Additionally,​ some coins with higher mintages can be quite rare in​ certain grades such as​ higher MS condition coins due to​ weak strikes,​ etc.
3. Condition. This is​ the​ most obvious one. When comparing the​ same coin,​ the​ better the​ grade,​ the​ higher its value.
4. Age. Although age can have some factor,​ I would rate it​ lower than the​ three above

Ok then,​ considering all these factors,​ how do I find nice coins that I can afford that will not only appreciate in​ value,​ but appreciate at​ a​ higher rate than other coins? I think the​ key word here is​ “nice”. Coins other than Mint State coins can appreciate in​ value if​ you​ know what to​ look for. Look at​ the​ 4 driving factors of​ price again. They are demand and scarcity. Take a​ good look at​ the​ following chart. the​ chart shows a​ good comparison of​ some different coins. Some you​ might consider a​ good investment and some you​ may not. the​ main comparison I am trying to​ make is​ from 2018 to​ 2018. I had an​ old issue of​ Coins Magazine from November 1973 so I thought I would throw those values in​ as​ well.

First,​ let's look at​ the​ 1877 Indian Head Cent,​ the​ key of​ the​ series. in​ a​ one year period of​ time,​ the​ value of​ the​ coin rose 18-19% depending on​ condition. the​ 1909 S,​ the​ coin with the​ lowest mintage of​ the​ whole series rose only 2-3%. Take a​ look at​ the​ mintages. the​ 1877 had over 2.5 times the​ coins produced than the​ 1909 S yet is​ valued much higher. Part of​ this is​ demand and there are probably less 1877 dated cents to​ go around.

Next,​ take a​ close look at​ the​ 3 Lincoln Cents in​ G4. While the​ 1909 S and 1931 S are considered keys just as​ the​ 1909 S VDB is,​ it​ is​ the​ 1909 S VDB that has risen in​ price while the​ 1909 S did not budge and the​ 1931 S moved ever so slightly. it​ is​ interesting to​ note though that in​ XF condition the​ 1909 S VDB stayed the​ same.

Compare the​ mintages of​ the​ 5 above coins to​ the​ 1879 Shield Nickel. a​ mere 29,​100 nickels were produced that year yet the​ price for a​ G4 is​ a​ paltry $415

So,​ what does this all prove? to​ me,​ it​ proves that picking coins solely for investment is​ as​ tricky as​ playing the​ stock market. you​ just never know what may be the​ hot item. Certainly,​ key issues will continue to​ rise and will probably rise at​ a​ higher rate than non-key issues. if​ you​ are truly set on​ buying rare coins as​ an​ investment and you​ cannot afford the​ high-end items then keys in​ some of​ the​ lower grades may be the​ way to​ go.

What will be the​ next “hot” coin? Only time will tell and your guess is​ as​ good as​ mine. I suspect that with more and more interest in​ Lincolns,​ especially with the​ upcoming changes to​ the​ Lincoln Cent ,​ there will be more demand for Lincoln Keys,​ but that is​ only a​ guess. Others to​ keep an​ eye on​ are the​ 1932 D and S quarters. the​ State Quarter program has created more interest in​ quarters. This is​ just pure speculation. as​ for me,​ I will just continue to​ buy the​ coins I like.

As always,​ happy collecting!

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