Indiana State Numismatic Association

Numismatic Articles - 1980 Reinactment

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1980 REINACTMENT?????

 

A few years ago, I wrote an article entitled “A Blast from the Past” where I brought back a look at what happened in the precious medals market in 1980.  As of this printing, Gold was sitting at an all time record of $951.00 an ounce and silver is at $18.80 an ounce.  Regular day to day coin transactions back in 1980 were nearly at a dead stop with all the concentration being on gold and silver.  Today in 2008, the past is almost repeating itself and at the same time in 2008, we are witnessing a record number of new collectors in all areas of the numismatic theater and not just in the precious medal market.  Probably the biggest boost to the collecting of coins was the US Mint’s state quarter program in 1999 bringing in millions of new collectors.  Remember when the US mint used to just sell mint and proof sets…look what they are selling now.  There many different products that can be purchased for any type of collecting enthusiast. 

Coin collecting is both a popular collecting hobby and an investment. As an investment, coins are usually not short term.  Some experts recommend a holding period of three to five years, and preferably five to ten. The supply of coins is fixed, since only a given number of coins are minted per year, adding to the potential value of coins. Unlike securities markets, the market for coins is unregulated. Consequently, discerning decision-making is critical to avoid purchasing overvalued coins and, in some cases, counterfeit coins. TV shopping channels offering all those coin deals and sets are usually not a good venue  to purchase coins for investment.  They are usually over sold at inflated prices above true market values.  Coin shows, coin dealers and coin clubs are the best places to purchase what you want.  Always shop around for the best deals.

Like any market, the coin market fluctuates due to supply and demand conditions. In addition, inflationary expectations fuel the coin market. Despite the implication of a high return in many ads for coins, there is a great deal of risk in coin investments. Consequently, the decision to invest in coins should be accompanied by recognition of the risk involved and a decision to investigate thoroughly prior to purchasing.

               If you  are starting out in coin collecting, and are interested in something other than coins that are already in circulation, there are a number of places where you can purchase your coins. The value of joining a professional coin club or group cannot be underestimated, as you will be able to access many additional resources and pick up some valuable tips. You can also invest in reference and informational books on coin collecting, which can also offer valuable advice on coin collecting and buying coins for your collection. Coin shops are a good place to find  interesting coins, and a professional dealer can offer advice as well as some great coins for your collection. Coin shows are also a valuable resource, and a great way to network as well as access coins from a range of dealers all in once place. Mail order coins are often available, and you may sometimes see commemorative coins advertised in magazines and periodicals. You can order these by sending a check and an order form. The Internet is another place where you can find coin dealers and you can order your coins online. The coins will then be delivered to your door. With both of these sources, you should ensure that the dealer has a good reputation as well as a good return policy. When the coin arrives, check it carefully, or if you are inexperienced get a professional to check it for you.

This will ensure that you can send the coin back should it turn out to be anything other than you expected. Be aware at this present time that there are a large quantity of fake coins coming out of China and Southeast Asia. When purchasing rare coins, the best policy is to buy them certified.  These certified or “slabbed” coins make it easier to sell them in the future. (There is an article on “slabbed” coins on the ISNA Website: http://www.indianastatenumismatics.org/ under Coin Collector’s Corner)Compare this to the title to your car.  It is much easier to sell your car if you have the title to it. Auctions can result in some valuable finds, and you could get some excellent deals and very interesting coins from an auction. Likewise, flea markets can throw up some real gems, and you can add some really interesting coins to your collection through this source. Which came first?  The chicken or the egg?  The point is, in my opinion, if you are going to collect coins or a particular coin series; it is best to first buy the book on them and do your homework.  Spend ample time reading, looking at photos, learning from experienced collectors and asking as many questions as needed from not only other collectors, but dealers as well. The hobby of coin collecting is a continuing process that will last for as long as you are continuing the hobby. Your knowledge and training will save you a lot of money as well as make you money when the time comes, but more importantly, have fun while learning. Education is the best defense against unscrupulous dealings of all kinds whether you are collecting for investment or just for enjoyment.

 

Ed Fischer