To open 2017, Steve Roach tackles the
appeal of rare coins and why they command the hobby's
attention. Below is the fourth and final 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.
Will established collectors come out and buy rare coins in 2017?
Will new collectors and investors enter the rare coin market,
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.
Because of the transaction costs inherent in buying and selling
coins, it’s almost always well-advised to take a long-term outlook for collecting, with a holding
period of at least a decade.
But many collectors wonder, if they take a long-term outlook on
their coin investment — as is advised — will there be another
generation of collectors willing to buy their coins?
The U.S. Mint recently released a report that showed their product
sales and revenue since 2000. The report shows general declines in
both in the past five years. This speaks to a decline in interest in
coin collecting — at least in collecting modern Mint issues — that can
be attributed to the end of the 50 State quarter dollar program in 2008.
Read more of Steve’s look ahead at the 2017 rare coin market:
The appeal of investing in coins:
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.
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.”
Learning lessons from
There’s a general concept across collecting categories that the
highest caliber of objects is most desirable for investing, but this
is not universally true. Read insight from these collectors”
One particularly jarring graphic showed a decline in the numismatic
customer base over the past decade paired with declining sales volume.
The Mint confirmed the statistics seen in numismatic publications and
hobby organizations like the American Numismatic Association: the
people that buy coins are largely white males; few collectors are
women and even fewer are non-white.
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The Mint’s statistics were not encouraging, in that even as the
United States is becoming increasingly diverse, rare coin buyer
demographics aren’t budging. Especially as non-white groups become
upwardly mobile and have increasing buying power and discretionary
income, it is essential to make coin collecting attractive and
accessible to a broader range of groups including African Americans,
Hispanics and women. For rare coins to be a solid long-term
investment, coins have to remain relevant to potential buyers.
Surveys of collectors show that an interest in collecting is usually
sparked when people are very young; most collectors recall being
introduced to coins when they were approximately 6 to 9 years old.
Even if the young person doesn’t start collecting coins right away,
the seed grows and then something sparks renewed curiosity in them as
an adult. They might start buying small, and then the buying grows.
This cycle must be nurtured in young people today, where collecting in
general may not come as naturally as it did for prior generations.
A coin can be used to teach history and economics; its designs can
cultivate artistic and aesthetic values just as coin grading can teach
about relative quality. The greater rare coin market consists of
hundreds of thousands of individual transactions online, at coin shows
and between collectors. These many individual micro transactions
combine to create the greater rare coin market and these seemingly
individually insignificant events can, over the course of months and
years, shape the rare coin market in massive ways.