Mike Davis had an interesting article in Numismatic News
regarding the difference between coin collecting and investing. Coin World also recently published their rare
coin index which shows a 4.98% increase in the index.
My own feelings are somewhere in the middle. I typically buy coins that are interesting to
me. I also expect price appreciation in
the coins I buy. I don’t weigh the
expected price appreciation of coins versus other potential investments such as
stocks, bonds, or commodities. Nor do I
consider the liquidity of purchases. My
current interest is in capped bust half dollars. I have purchased a few of these coins. I have also limited my purchases to non-mint
state coins which will not appreciate as well as mint state coins.
In terms of portfolio management, my net coin holdings are
less than 1% of my financial holdings and an even smaller percentage of
holdings including other real property.
Further, I would be hard pressed to pay over a $1000 for a coin, while I
routinely have stock holdings above that threshold.
However my investing strategy is similar to my collecting
strategy. If I find a company
interesting, I will look at whether it is publicly traded and then consider
whether it is accurately priced. If it
is trading below my expectation, I will often purchase a small stake in the
company.
Davis’ article also critiques the US Mint, which certainly
is operating very differently today than it has in most of its history. In fact it would cost nearly $23,500 to
purchase all issues from the US Mint in 2011.
I only purchased 5 issues from the US Mint and that was unusual for me
as I found the commemoratives particularly compelling. I agree with several points of the critique
and will curtail my purchases of proof sets in the future. I will also make a point of getting rolls of
coins from my bank to bring into circulation and possibly even find collectible
coins.
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