US Coins

What to expect from the rare coin market in 2017

To open 2017, our own Steve Roach tackles the appeal of rare coins and why they command the hobby's attention. Below is the first segment of his extensive look at the rare coin market as it exists today and what may garner attention in the coming year:

As the stock market reaches for record heights and precious metal prices stay at relatively stable levels, one wonders where the rare coin market is headed in 2017. With all of the potential for change under a new presidential administration, many are optimistic but cautious; hesitant to make any major changes in their investment strategies and perhaps waiting for the right time to buy rare coins.

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Will established collectors come out and buy rare coins in 2017? Will new collectors and investors enter the rare coin market, increasing demand?

Will collectors with great coins decide now is a good time to sell, thus increasing the number of rare coins in the marketplace? Or will collectors simply upgrade average quality material for nicer coins and increase the glut of less desirable coins in the market?

Will gold and silver move up in 2017, attracting attention to rare coins as an alternative investment or will precious metals fall in 2017, making some coins more affordable for buyers?

Of course, each of these questions doesn’t have a clear answer and not one of these will singularly define the upward — or downward — path of the rare coin market in 2017.

If you’re interested in stepping up your rare coin game, or if you’re entering the rare coin marketplace for the first time, you should look at the rare coin market as it exists today and seek to understand the pitfalls and possibilities inherent in rare coin investing. Smart coin buying today requires at least an awareness of the changes that might impact the future when it comes time to sell. 

The appeal of coins

I was chatting with a friend about the rare coin collection of D. Brent Pogue and his family, selling in a series of auctions by Stack’s Bowers Galleries and Sotheby’s for the past two years. The Pogue Collection has realized $85 million so far and the record prices have energized the high-end of the rare coin market. My friend asked, how could a coin be worth $1 million or even $10 million?

The answer is that even though it may not feel like it all the time, there are still hundreds of thousands of people who collect coins and millions who have fond memories of coins. Among those millions are some people with lots of money and who seek to own examples of the very finest coins.

My friend said that coins shouldn’t be worth that much since they don’t generate cash. After all, you can’t usually borrow against them and generally, coins are tougher to sell than other more traditional investments like stocks and bonds. Yet, he didn’t factor in the joy of ownership and the deep connection to history that coins provide owners.

Some coins, including most in the Pogue Collection, are beautiful, and pride of ownership is key when looking at the top end of collectible markets.

While owning a rare coin may not give the immediate social boost that comes with owning a great painting — a late Van Gogh landscape hanging above the fireplace of one’s home is an instant signifier that a person is both rich and of a certain cultured taste — rare coins provide more intimate and personal pleasures.

Coin collectors and investors are after something distinctive to coins: a unique passion tied into the acquisition and ownership.

Numismatists share an emotional attachment to coins as portable pieces of history and a love of “the hunt” to find the right piece. There’s a delicate balance between the rational and the pure joy found in collecting and stewardship that means that the rare coin market can be unpredictable. It’s that unpredictability that keeps collectors and dealers constantly on their toes, and it keeps our hobby lively.

For the highest end of the rare coin market, valuations are an art rather than an exact science. A coin’s value can decline, but the public doesn’t know it until it sells. That is why market analysis pieces often rely heavily on auction results: they are public and transparent representations of the current rare coin market.

Read more of Steve's look ahead at the 2017 rare coin market:

1942-S Washington quarter dollarThe strategic advantages of investing in coins:This is often seen in 20th century U.S. coins. A 1942-S Washington quarter dollar has a mintage of nearly 20 million pieces and is considered a bullion coin in circulated grades.”

Some lessons to learn from three great collectors: In addition to Pogue, a number of other top collections have come to market recently — perhaps most notably Eugene Gardner and Eric Newman.

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