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Okay, let’s get something
straight… I do not advocate the purchase of United States coins strictly for
investment purposes. Like most traditional collectors, I believe coins are to be
primarily appreciated for their artistic beauty, historical connections, and the
joy of pursuing them. However, it should be no secret that a significant number
of us do add to our numismatic holdings while simultaneously peeking at the
payback angle, too.
In truth, there are probably substantial numbers of traditional collectors who
prefer to acquire coins destined to increase in esteem and value over time;
treasured heirlooms and a source of pride to be passed from one generation to
the next. On the flip side of this equation, it seems implausible that anyone
would buy a coin with the hope or expectation to see it stagnate or decrease in
value. Indeed, any commentator who suggests the words “investment” and “coins”
should never appear in close proximity to one another is ignoring a heavily
populated segment of our hobby.
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No one can go wrong in buying a 1916-D Mercury
dime; it is the quintessential bullish US coin, gaining in value at a 5-10%
average annual pace over a period of many years, across the full grade spectrum.
Buy only from a reputable source. Coin Photo courtesy of Ira & Larry Goldberg
Coins & Collectibles, Inc., Beverly Hills, CA. |
Now that we’ve established that it’s not
numismatic heresy to seek coins with strong upside possibilities, let’s get down
to basics. The guiding principle is simple: Any coin that has demonstrated
solid, consistent gains over a long period of time is likely to show continued
growth in the years ahead. Easily said, but as we shall soon see, not so easily
put into practice.
So exactly how does a one identify coins with a potentially bullish future? The
best clues are revealed by analyzing the retail value trends over a long period
of time for a given coin. Observing current prices alone does not yield enough
information to correctly evaluate prospective price movements. What was the coin
selling for two or three years ago compared to today? Dig deeper, and find the
market price for the same coin 5-10 years ago. While you’re at it, get something
from 20-30 years or more in the past, too. The more good data researched, the
more reliable will be your final conclusions. Now whip out your spreadsheet and
chart the numbers, or compute annualized rates of return. Flat or negative
trends are bad. Positive trends are good. Steep positive trends are best. Any
coin displaying a proven annualized growth pattern of at least 5-10% over a span
of many years qualifies as an attractive option for the collector desiring coins
headed for much higher price levels a few years down the road.
During the course of my lengthy numismatic career,
I’ve researched the long term value trends of
most collectible US coins. Thanks to my trusty computer, I’ve calculated
annualized compounded percentage return rates and honed in on a handful of coins
that have consistently beaten the overall coin market averages. Unfortunately,
the blue-chippers are scarcely encountered. Perhaps it is this fact that
explains why so many well-intentioned hobby purists scorn the idea of blending
coin collecting with the profit motive.
Individuals whose objective is to satisfy their numismatic pleasure by
assembling a collection certain to be the envy of tomorrow’s collectors must do
their homework today. Remember to research historic value trends and evaluate
growth potential based on previous performance. One last word of advice… never
loose sight of the fact that you are handling artifacts of America’s past, and
that all of us are merely their temporary custodians. Respect these coins and
the history they represent, and you’ll always discover new avenues of adventure
not found in most other investment opportunities.
Author Daniel J. Goevert is the
webmaster of US Coin Values Advisor,
specializing in coin value trends and listing bullish US coins. Other offerings
include detailed coin collecting advice as well as an illustrated history of the
United States and the US Mint.
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