A "safe" coin as an investment?

[Peter 615]

Personally, I don't particularly go for 'perfection', but eye appeal. This may not be as good as they get, but I'd rather a couple of coins like this than one amazing one.

In the end, it all comes down to what appeals to you!

Very nice Richard, I'd be happy with this one, though a bit of a side-step from your usual Charlies, however!

Nurse...I'm wiping the slobber off my screen.What a fantastic looking coin. :)

[TomGoodheart 403]

Thanks for all your advice! It is most helpful.

I think I may have come accross a bit wrong... until now I have only purchased coins that I like, and that is what I intend to do with this purchase too. I am not looking to buy a coin for a quick profit! What I was more concerned about, was losing BIG on my first expensive coin, should I have a rainy day and need to sell it on.

From all your advice, it seems that I can not go too wrong if I stick to a coin with good eye appeal, the best grade I can afford, and to make sure the price I buy it at is a good one!

For this purchase, I may actually go the old fashioned route and visit a coin or antique shop! That way I can see it up close and personal before I commit.

I think if you pay a fair price then the main factor will be time. Had I kept hold of many coins until today, I would have turned a nice profit on almost all of them. However I wanted the money to buy other coins at the time and didn't.

Dealers sell for a profit so are going to want to buy at a discount to the current market value. Wait a few years for the market price to go up and the dealer's offer will approach (and hopefully exceed) what you paid. Sell too soon however ...

OK, rarities are a shortcut in that if someone really wants something that rarely comes on the market they will have to pay the asking price. But in the end there's always a risk. The only way to hedge against it is to know your stuff so you don't pay too much and buy what you like in the hope that others will like it too.

Personally I wouldn't rush into it. Decide what you like and do some homework. In every coin series there are gaps that are difficult if not near impossible to fill. And when that time comes you will have to pay for the pleasure, so it's always handy to have a 'war chest' for when that coin appears.

But knowing which are the really tricky coins to find, and which just take patience, isn't something that can be picked up overnight. If it was, I personally think it would take some of the fun out of collecting! Though you can learn some of it from other collectors - I think that kept me going for about five years, before I started to get a feel for which coins can be found in decent condition and which are almost invariably poor, making better examples particularly desirable. And I'm still learning!

Edited June 17, 2012 by TomGoodheart

[Peter 615]

Thanks for all your advice! It is most helpful.

I think I may have come accross a bit wrong... until now I have only purchased coins that I like, and that is what I intend to do with this purchase too. I am not looking to buy a coin for a quick profit! What I was more concerned about, was losing BIG on my first expensive coin, should I have a rainy day and need to sell it on.

From all your advice, it seems that I can not go too wrong if I stick to a coin with good eye appeal, the best grade I can afford, and to make sure the price I buy it at is a good one!

For this purchase, I may actually go the old fashioned route and visit a coin or antique shop! That way I can see it up close and personal before I commit.

I think if you pay a fair price then the main factor will be time. Had I kept hold of many coins until today, I would have turned a nice profit on almost all of them. However I wanted the money to buy other coins at the time and didn't.

Dealers sell for a profit so are going to want to buy at a discount to the current market value. Wait a few years for the market price to go up and the dealer's offer will approach (and hopefully exceed) what you paid. Sell too soon however ...

OK, rarities are a shortcut in that if someone really wants something that rarely comes on the market they will have to pay the asking price. But in the end there's always a risk. The only way to hedge against it is to know your stuff so you don't pay too much and buy what you like in the hope that others will like it too.

Personally I wouldn't rush into it. Decide what you like and do some homework. In every coin series there are gaps that are difficult if not near impossible to fill. And when that time comes you will have to pay for the pleasure, so it's always handy to have a 'war chest' for when that coin appears.

But knowing which are the really tricky coins to find, and which just take patience, isn't something that can be picked up overnight. If it was, I personally think it would take some of the fun out of collecting! Though you can learn some of it from other collectors - I think that kept me going for about five years, before I started to get a feel for which coins can be found in decent condition and which are almost invariably poor, making better examples particularly desirable. And I'm still learning!

Part of the fun is the chase.When I do get something that I really want I'm like a dog with two Di***

[DaveG38 408]

It seems to me that the real issue here is the likelhood of a downturn in prices across the board, of the kind seen in the past. We all know that there was a major ramp around decimalisation followed by a long period in the doldrums until around the late 1990s, when things took off and have continued ever since. The question is whether the long run of price increases will continue, level out or decline.

Interestingly, the crash of 2008 and the ongoing recession doesn't seem to have dented prices one bit, even in the middle grade/value where a decline might have been expected. This is probably because there are investors out there who no longer see the stock market as the place to put their money and coins (and classic cars) represent a decent investment based on past performance. If and when the stock market stabilises and profits return to normal, these investors will cash in their coins (unless they become genuine collectors) and this may send prices lower. However, there is still the internet factor which has widened the availability of coins and it may be that this keeps prices steady, rather than declining.

Overall, I don't really see a major crash in prices, which would drag all coins in any grade down, but bubbles always burst! The question is whether the current prices are in a bubble or not. Arguably though, a major Eurozone crash might well spark a depression and that might play very badly for coin prices as people are forced to realise assets in order to survive. In this situation, the biggest losers are likely to be common coins even in top grades, and the middle grades, whereas rarities are likely to suffer least. Like all investments, you pays yer money and ........

[Peckris 579]

It seems to me that the real issue here is the likelhood of a downturn in prices across the board, of the kind seen in the past. We all know that there was a major ramp around decimalisation followed by a long period in the doldrums until around the late 1990s, when things took off and have continued ever since. The question is whether the long run of price increases will continue, level out or decline.

Interestingly, the crash of 2008 and the ongoing recession doesn't seem to have dented prices one bit, even in the middle grade/value where a decline might have been expected. This is probably because there are investors out there who no longer see the stock market as the place to put their money and coins (and classic cars) represent a decent investment based on past performance. If and when the stock market stabilises and profits return to normal, these investors will cash in their coins (unless they become genuine collectors) and this may send prices lower. However, there is still the internet factor which has widened the availability of coins and it may be that this keeps prices steady, rather than declining.

Overall, I don't really see a major crash in prices, which would drag all coins in any grade down, but bubbles always burst! The question is whether the current prices are in a bubble or not. Arguably though, a major Eurozone crash might well spark a depression and that might play very badly for coin prices as people are forced to realise assets in order to survive. In this situation, the biggest losers are likely to be common coins even in top grades, and the middle grades, whereas rarities are likely to suffer least. Like all investments, you pays yer money and ........

The thing is, all those past peaks and troughs were each for differing reasons - decimalisation (+ then -), the oil crisis and inflation, the silver bullion bubble, Thatcherism (which I feel sure caused the stagnation from the early 80s to the mid-90s - people had lots of other investment opportunities), the internet. Experts still seem to think the British coin market is undervalued compared to the American market, but is the latter overvalued? It's certainly a different collecting environment compared to ours. However, even if ours is undervalued, it may be seeing weird eBay-induced peaks that will "correct" in the short to medium term, even if the UK coin market as a whole continues a steady rise.

No coin bet is entirely safe, though the advice to buy "the best quality you can afford" has never been proved wrong, especially in the long term.