What Type of Coins Should I Invest In?

The start of another year seems like a good moment to step back a little, and consider what direction a coin collector might go in the coming months. A recent review of the growth in value of coin investments, by the Professional Numismatists Guild (PNG), gives us some helpful insights and guidance.

The PNG found that the greatest increases in value took place at opposite ends of the market, with reduced growth in the middle. They looked at the values of coins in the ‘less than $500’ market, in what are called ‘collector’ coins. These are mainly uncirculated or circulation coins in good condition, with some rarity value. At the other end of the market, are rare, high-grade historic coins, which are valued at over $50,000. Both categories saw growth, but in the middle of the market there was significantly less growth in value.

The PNG put the weak growth in the middle of the market down to the fact that investors had moved back into the stock-market, currently booming, and into cryptocurrency. These latter, purely speculative markets, since there is no way to give any objective value to Bitcoin or other cryptocurrencies, have seen wild rises, but are probably due for some wild crashes too. Anyway, you can’t put a Bitcoin in a display case, as most true coin collectors want to.

The PNG is a non-profit organization that has been in existence since 1955. Its members include many of the top rare-coin and paper-money dealers, so they have valuable, direct experience in the market place. The top sales in 2017 were an 1804-dated U.S. Class I silver dollar that sold for $3.29 million, and a 1794 silver dollar that cost someone $2.8 million. Total sales at public auctions across the country were well over $300 million.

So what lessons should a coin collector take from this information? It seems clear that there are two directions to take if you want to see the value of your collection increase in 2018. Either be prepared to invest big in something rare and high-grade, or stay much lower in the market. Those splurges on a coin worth a few thousand dollars don’t look like good investments at this time, and few of us are up for the big buys anyway. The best advice is to stay in the lower end of the market, with coins in the tens or hundreds of dollars range. This will mean you can happily expand your collection in number, rounding out different series, buying silver and a little gold. Stick to uncirculated coins in the best condition, and stay in popular ranges, where re-sale is relatively easy.

This relative absence of ‘investors’ in the market right now seems to promise well for the future. If you collect coins while others are not, you will pick up some good deals. When the investors leave a falling stock-market (and it always falls sooner or later), and they have been burned by their speculation around cryptocurrencies, they will be back looking for more stable markets – like coins – and the steady collector will reap their well-deserved rewards.

Happy coin collecting for 2018!