What rare coins to invest in.

[Coinbuyer555]

being 61 the thought of entering the twilight years has been on my mind and I wanted to ask the forum folks what investment strategy they consider appropriate for the next 10 years. I have been researching the gold coin market prices and have bought the latest Marsh. Prices seem to be up around 10% to 20% a year for proofs.

I have been buying British Proof sovereigns and 1923 South Africa, have a couple 1902 long sets, value all told is around $80,000CDN, about 50,000PDS.

Its part of a diversification strategy and I was intending to buy the 1887 sovereign and half sovereign proof next which will cost around $10,000.

As for the Victorian sovereigns I have a dealer looking out for the 1859 Ansell and I was thinking of the 1820's in high quality slabbed condition.

Does anyone have any thoughts to offer on this strategy?

[Stuntman]

I think it's an interesting strategy but I suspect your buy/sell spreads will be quite large.  The coins in question aren't really linked to the price of gold, so you are betting on the fact that they remain objects of desire for well-heeled numismatists.  Personally speaking, I reckon the demand pool for these coins is pretty low, and it may take you some time to liquidate these coins for a decent profit in the future.

That said, you would own a super (although pretty small) collection of fabulous coins.  

 

If I was purely thinking about investment I would perhaps consider rare but well known (and hence popular) predecimal silver and bronze in as high a grade as you can find.  Possibly coins that are slightly unloved by the main market at the moment (although you still need these monarchs/denominations to come back into fashion).  

I suspect most on here buy most coins very much for the love of it rather than as investments but I will be very happily proved wrong.  My own investment money goes into world stock markets and a small percentage goes into 21st century UK gold bullion coins (Sovereigns, Brittanias, Lunars and Queens' Beasts) but these are essentially a hedge as gold, with the side benefit of being properly awesome to hold.

 

Good luck with whatever you decide, post some pictures of what you have already so we can drool over them!

[Coinbuyer555]

From 1996 to 2000 I bought copper and bronze UK pennies and sold them in 2013 at LCA, along with Cromwell Crown, half crown and shilling, 1911 long set, 1937 long set, to raise some cash.. There was a good profit made but I have noticed that category of prices has gone steady or even down, for the pennies, in recent years. So I think I sold at the right time, the proofs have increased in value though.

I was only divesting 20% of my savings as you seem to be doing the rest is in income producing stocks and trusts but of course there will be another downturn, no one knows when of course but sure to happen with valuations being what they are.

I have bought some 2017 sovereigns, Piedfort, BU plain edge, only due to mintage numbers being so low. I think they are speculation for investors but at least they are gold.

[Stuntman]

It'd be interesting to see what the serious penny collectors on here think about the state of the market.  Might it actually be a buying opportunity for similar coins to those you sold?
I reckon a fair few of your LCA sold coins now reside in some collections on here 

Back to the sovereigns - I do like the George III, George IV, William IV and Victoria shieldback designs and would love high quality examples of these in my own collection but the 'bang for bullion buck' ratio puts me off.  I know that may sound irrational, but if I was paying say £2000+ for a 19th century sovereign I would probably bottle it and by 2 x 1oz 0.9999 gold bullion coins.

You won't go far wrong with your 2017 sovereigns assuming you bought them at or near the issue price.  They were a bit too rich for me at the time and I prefer non-proofs to proofs (just personal preference and that bang for buck thing again ) - but I did succumb to the considerable charms of the 2017 BU Quintuple, which I do not regret for one second.  Any excuse to post a picture...

[jaggy]

The concern I have with coins as an investment is the costs associated with buying and selling and the relative lack of liquidity.

I can buy and sell shares with either no brokerage fee (my bank gives me 100 free trades a year) or a very low fee. I can also sell them in the market through a simple online transaction and, usually, almost immediately. 

Not so coins. Mostly they are bought and sold through a dealer or through auctions. Both have their costs. Auctions generally charge a premium on both ends of the transaction and that can be as high as 20%. Dealers have to make a profit so cannot buy coins at retail. They will pay something less than that. Cost wise, it is a much more expensive transaction than buying or selling shares.

Then there is liquidity. There is a smaller pool of coin buyers, there are fewer opportunities to buy and sell and, here in the USA, coins pretty much have to be certified and slabbed which adds more cost and risk to the process if you are buying raw coins.

Of course, you can make money with coins. But you really need to know what you are doing so that you can spot good coins at reasonable prices or which appear to be underpriced. I have sold relatively few coins because I am a collector and not an investor and, on those coins, my net profit is 32%. However, most of that profit came from just one coin for which I received an unsolicited offer which was too good to refuse.

The other angle is to buy coins for their bullion value which is essentially speculating on the price of gold. Money can be made but it can also be lost in that market.

[richtips86]

I first got into numismatics with this idea that coins could be an investment. I quickly lost that view and then bought coins for the pleasure of it, enjoying holding them, imagining the history of who had used them etc. I have made a decent sum from trading recent decimals, but only through constantly scouring eBay, reading the mintage figures released by the RM and following trends and identifying possible future growth coins has that been possible.

Coins like gold will never produce anything, they’ll never pay a dividend and are driven by fashion in terms of the price they will yield, so any investment is purely a punt that there’s someone who will pay more for the coin than you did in the future and is therefore not an investment but speculation. 

Like stuntman, my investment monies go on accumulation passive trackers and growth shares (buy Bango BGO!) There will be a downturn, but I’ll still get my divis/ greater buying opportunities.

[coinkat]

The biggest challenge is determining what British rarities and/or condition rarities will capture interest that will translate into increased demand and higher valuations. Good luck in your endeavors

[TomGoodheart]

Yeah, there are fashions in coin collecting, just as with anything else.  It's difficult to predict what will be desirable in 10 or 20 years time. 

In my own field of Chas I shillings, the interest in legend variants, differences in harp design, even collecting by mint mark appears to have reduced considerably from the days of Brooker, Osborne or Sharp (all of whom collected during the 1970s and a bit further)  The current focus, as with many denominations/ reigns, is on quality over rarity.  It's hard to imagine many large collections of many similar, but subtly different, coins being assembled now, both due to the cost and apparent collector interest.

I imagine when my collection is finally sold most coins will go for rather more than I paid for them.  But it's not going to be at a level where I could consider it to have been an investment.  OK, admittedly I didn't start with that in mind.  But I think the mind-set required for investment (buying what the market will want, not what you find pleasing) is quite different.  Like others, I collect for pleasure.  And hopefully other investments will cushion my retirement.

[copper123]

If you intend to invest for maximum price growth I would surgest you invest in the rabidly growing market of china and india

[Coppers]

I suspect we may have already missed the boat on the coins of those two countries.  Buy what you enjoy collecting -- what interests you.  That way you'll at least gotten something out of the hobby even if the investment does not work out.