Quality purchase! Quality purchase! That’s all you hear these days when thinking of exotic currencies as an investment. Firstly, are you really buying coins as an investment or just for the fun of owning a piece of history? This is the real dilemma sometimes for many collectors, or are they investors? Everyone wants to make sure their investment is protected, but there are no guarantees, especially on rare coins. In fact, some rare coins take years to appreciate that they can sell at a profit.
Hey, I wish I could have spent $ 100,000 in this 1919 Standing Liberty Quarter in PCGS-approved MS67. There is only one coin with that date certified by PCGS as of February 7th, so it is the best coin available. But not many of us have this luxury. I don’t, and I suspect you are not. It’s hard to understand that I have to pay for a coin more than my first home cost. And even though the rarest and most beautiful coins have reached very high prices, what does this leave for the rest of us? Not much, unless you’re willing to do some work.
So, if my interest in exotic currencies is as an investment, what should I do? Well, there are many other currencies and options that you can choose from. First, let’s look at what determines the price of a currency.
One question. Demand is perhaps the main price factor. A vivid example of this is the 1909 S VDB with a voltage of 484,000 and an estimated retail value of $ 720.00 in the G4 and an estimated $ 7,500 in the MS65 for an 1879 Shield Nickel. But the G4’s estimated retail value is only $ 415 while the MS65 example is $ 1950. To further illustrate this point, PCGS received 703 MS65 Red 1909 S VDB cents and only 27 MS65 Shield Nickels. How Many Shield Nickel Collectors Do You Know Against Lincoln Cent Collectors?
2. Scarcity. Generally speaking, regardless of the question, the rarer the coin, the higher its value. Usually this is very true, especially when comparing dates within the same series. Rarity should not be confused with currency in general. During the silver booms, many silver coins were smelted for their alloy content. Also, some raised coins can be very rare in some grades like higher state coins than MS due to weak strikes etc.
3. The requirement. This is the most obvious. When comparing the same coin, the better the rating, the higher its value.
4. Age. Although age may have some factors, I would rate it below the three above
Well, looking at all these factors, how do I find some cute coins I can afford that will not only increase in value but also value at a higher rate than other coins? I think the key word here is “nice.” Coins other than Mint State coins can increase in value if you know what to look for. Look at the four price drivers again. They are demand and scarcity. Take a closer look at the following table. The graph shows a good comparison of some different coins. Some may be considered a good investment, some may not. The main comparison I’m trying to do is from 2005 to 2006. I had an old Coins Magazine issue from November 1973, so I thought I’d include these values as well.
First, let’s take a look at the 1877 Indian Head Cent, the key to the series. In one year, the coin’s value increased by 18-19% depending on conditions. And the lowest-voltage coin in the entire series in the 1909 S rose by only 2-3%. Take a look at the coins. 1877 was 2.5 times more than the coins produced from 1909, but it had a much higher value. Part of that is the question and there are probably less than 1,877 cents dated.
Then take a closer look at the 3 Lincoln cents in the G4. While the 1909 S and 1931S are just as key as the 1909 S VDB, the 1909 S VDB has risen in price while the 1909 S has not moved and the 1931 S has moved slightly. Interestingly, the 1909 S VDB remained the same under XF conditions.
Compare the effort of minting the five coins above with the Shield Nickel of 1879. Only 29,100 nickels were produced that year, but the price of the G4 is $ 415.
So what does all this prove? For me, this proves that collecting coins only for investment purposes is as complicated as playing the stock market. You never know what a hot ingredient might be. Of course, the major issues will continue to grow and are likely to grow at a faster rate than the non-primary issues.