Wednesday, June 13, 2012

First Spouse Coins

While of limited means, I am fond of collecting United States coinage.  I started collecting Morgan silver dollars and annual proof sets.  As my interests changed, my series of choice is capped bust half dollars.  I have not purchased the 2012 proof sets and I don’t intend to.  As opposed to fiscal prudence, my motivation is simply to limit my purchases as well as coin inventory.  If history is any guide, these coins will not appreciate in value much.

I do not collect large cents or early gold, but I have spent some time researching these series.  Of particular interest to me are $3 gold coins issued from 1854 to 1889.  Several issues had mintages of around 1000-2000 coins.  When gold was at $50/ounce in 1972, these coins had a minimum Red Book price of $350, which is nearly all numismatic premium (the gold content was a little over $7).  I would like to buy one of these coins, but in 2012 the minimum prices I have seen are on the order of $2500.  $2500 represents a numismatic premium of about $2250.

Inflation over the last 40 years has averaged 4.4%.  Gold has appreciated about 9.1% per year, handily beating inflation.  However the $3 gold coin has only appreciated about 5.0% per year, slightly edging out inflation.  Meanwhile the S&P500 has returned an average of 6.2% per year.

As an investor and a collector, I wonder if the First Spouse Coins which have mintages in on the order of 2000-3000 per issue command a significant numismatic premium in my lifetime.  Certainly in 150 years, these coins would be worth something.  However, collecting all four issues annually in proof and uncirculated grades will cost around $8,000 annually.  That is well above my budget.  However factoring out gold costs, the numismatic investment is around $150 per coin.  This is a much easier pill to swallow. 

While I don’t plan to own a complete First Spouse collection, I am interested in picking up an attractive issue at some point.  No offense to the engravers or first ladies, but Garfield, Hayes and Johnson are not the most attractive of the mint’s issues.

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