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Do I have to Buy the Best Quality Coins if I Want to Make Money?
By Keith Scott
Do I have to Buy the Best Quality Coins if I Want to Make Money?

By Keith Scott, Mountain View Coins

Buy quality! Buy quality! Buy quality! That's all you hears these days when you are considering rare as an investment. First, are you really buying as an investment, or merely for the pleasure of owning a piece of history? That is sometimes the real dilemma for many collectors, or is it investors? Everybody wants to make sure that their investment is protected, but there are no guarantees, especially in rare coins. In fact, some rare take years to appreciate to the point of being able to sell it profitably.

Hey, I would love to be able to plunk down $100,000 for a 1919-s Standing Liberty Quarter in MS67 condition certified by PCGS. There is only one coin with this date certified by PCGS as of February 7th so it is the finest available. But not many of us have that luxury. I don't, and I suspect you do not either. It's hard to comprehend paying more for a single coin than my first house cost. And while the rarest and finest of all rare have reached stratospheric prices, what does this leave the rest of us? Not much, unless you are willing to do a little work.

So if my interest is in rare as an investment, what do I do? Well, there are many other and options you can choose. First, let's review what drives the price of a coin.

1. Demand. Demand perhaps is the biggest driver of price. A clear example of this is the 1909 S VDB with a mintage of 484,000 and an estimated retail value of $720.00 in G4 and $7,500 in MS65 vs. an 1879 Shield Nickel. The Shield Nickel had a mintage of only 29,100 yet the estimated retail value of a G4 is only $415 while the MS65 example is $1,950. To further illustrate this point, PCGS has certified 703 MS65 Red 1909 S VDB cents and only 27 MS65 Shield Nickels. How many Shield Nickel collectors do you know vs. Lincoln Cent collectors?

2. Scarcity. Generally speaking, putting demand aside, the more scare/rare a coin, the higher its value. This is usually very true, especially when comparing dates within the same series. Scarcity should not be confused with overall mintage. During the silver booms, many, many silver were melted for there bullion content. Additionally, some with higher mintages can be quite rare in certain grades such as higher MS condition due to weak strikes, etc.

3. Condition. This is the most obvious one. When comparing the same coin, the better the grade, the higher its value.

4. Age. Although age can have some factor, I would rate it lower than the three above


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How counterfeiting could one day be irrevocably stifled by smartphone apps
Yesterday, the coin-collecting hobby got an update for the next generation: Lookzee. The app takes advantage of an iPhone?s camera to take an image of a collector?s coin, which is then cross-referenced against a database built from thousands of coins ...
Budget Coin Collecting: Finding Great Value at Major Sales
Fifty years ago, and there have been so many changes in the way the hobby and business has evolved. Standardized third-party grading, sight-unseen trades consummated electronically, population reports and auction data going back decades retrieved at the ...
Coin Collecting: Investors? Hobby With High Stakes
Numismatics: a hobby to some, a gamble to others and a serious investment to many collectors. The aim is the purchase of proof coins for pleasure and also a profit. The players range from small children hopeful of finding a 1913 Liberty head nickel in a ...
Cleveland man says coin collecting hobby is time well-spent
The hobby of coin collecting can be traced back as far as the Renaissance, when it became popular among some members of the wealthier class to present old and exotic coins to guests in the midst of festivals and other special occasions. For years, many ...
The Pawcatuck Coin Club: Members recount their passion
It can be easily stated that this is a group of passionate numismatists (those who study coins), committed to their hobby. For Scott Rottinghaus, an infectious disease doctor by profession, his coin-collecting hobby has permeated many facets of his life ...
Winona Coin Club has annual coin show on Sunday
Around that time is when Schneider picked up the coin collecting hobby himself. He said he was looking through change in pockets, coin jars and couch cushions, hoping he would find some of those pennies. Schneider said he enjoys coin collecting because of ...
A Tribute To Richard S. Yeoman,
Hobby pros are mourning the death earlier this month of Richard S. Yeoman, the author and creative genius who revolutionized coin collecting. Yeoman, a long-time Racine, Wis., resident, died while driving a car near his retirement home in Tucson ...
WHY COIN COLLECTING IS A FAVORITE PAST TIME
Coin collecting is a cherished hobby amongst collectors and often sparks many fond memories. Endless nights searching through sacks of coins and coin rolls in hopes of coming across a Wheat Penny, a Buffalo Nickel, or a Seated Liberty come to mind for some.

then, considering all these factors, how do I find nice that I can afford that will not only appreciate in value, but appreciate at a higher rate than other coins? I think the key word here is “nice”. Coins other than Mint State can appreciate in value if you know what to look for. Look at the 4 driving factors of price again. They are demand and scarcity. Take a good look at the following chart. The chart shows a good comparison of some different coins. Some you might consider a good investment and some you may not. The main comparison I am trying to make is from 2005 to 2006. I had an old issue of Coins Magazine from November 1973 so I thought I would throw those values in as well.


First, let's look at the 1877 Indian Head Cent, the key of the series. In a one year period of time, the value of the coin rose 18-19% depending on condition. The 1909 S, the coin with the lowest mintage of the whole series rose only 2-3%. Take a look at the mintages. The 1877 had over 2.5 times the produced than the 1909 S yet is valued much higher. Part of this is demand and there are probably less 1877 dated cents to go around.

Next, take a close look at the 3 Lincoln Cents in G4. While the 1909 S and 1931 S are considered keys just as the 1909 S VDB is, it is the 1909 S VDB that has risen in price while the 1909 S did not budge and the 1931 S moved ever so slightly. It is interesting to note though that in XF condition the 1909 S VDB stayed the same.

Compare the mintages of the 5 above to the 1879 Shield Nickel. A mere 29,100 nickels were produced that year yet the price for a G4 is a paltry $415

So, what does this all prove? To me, it proves that picking solely for investment is as tricky as playing the stock market. You just never know what may be the hot item. Certainly, key issues will continue to rise and will probably rise at a higher rate than non-key issues. If you are truly set on buying rare as an investment and you cannot afford the high-end items then keys in some of the lower grades may be the way to go.

What will be the next “hot” coin? Only time will tell and your guess is as good as mine. I suspect that with more and more interest in Lincolns, especially with the upcoming changes to the Lincoln Cent , there will be more demand for Lincoln Keys, but that is only a guess. Others to keep an eye on are the 1932 D and S quarters. The State Quarter program has created more interest in quarters. This is just pure speculation. As for me, I will just continue to buy the I like.

As always, happy collecting!

Keith Scott
www.mountainviewcoins.com
Keith Scott has been a coin collector for over 30 years and owns a small mail order/online store. His store is at www.mountainviewcoins.com

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Do I have to Buy the Best Quality Coins if I Want to Make Money?
By Keith Scott
Do I have to Buy the Best Quality Coins if I Want to Make Money?By Keith Scott, Mountain View CoinsBuy quality! Buy quality! Buy quality! That's all you hears these Read more...
 
 
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