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,
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
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:
The 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.”
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