A number of people have asked me about investing in coins. In my opinion, there are two things to consider in terms of investing, a coins composition and rarity. With this in mind, here are some possibilities.
With the Coinage Act of 1792, Gold Coins started being minted in Philadelphia. During the early 1800’s gold was discovered in the southern US and two branch mints would open, Charlotte, NC(mint mark ‘C’) in 1837 and Dahlonega, GA(mint mark ‘D’) in 1838. Also, New Orleans (mint mark ‘O’) would open in 1838 producing silver and gold coins. These three locations would produce gold coins until the Civil War broke out in 1861. Only New Orleans would reopen after the Civil War. In most cases, Charlotte and Dahlonega had very low mintages and very sought after. Gold would be discovered in California in 1848, which would open the San Francisco mint in 1854. With no train crossing the US, they would have to send the gold by boat. In 1870, the Carson City mint (mint mark ‘CC’) would open mainly because of the silver Comstock lode but also produce gold coins.
The early gold coins came in denominations of $1, $2,50 (Quarter Eagle), $3, $4 (Stella), $5 (Half Eagle), $10 (Eagle) and $20 (Double Eagle). If you should find a Stella coin, consider yourself very fortunate because I think there were less than 1,000 minted between 1879 and 1880. If you’re looking for more affordable gold coins (up to $1,000), you can go for coins after 1886.
With the Great Depression that began in 1929, people were hoarding gold coins more than ever. In 1933, the US stopped producing gold coins, taking us away from the gold standard. Most of the Double Eagle coins minted in 1933 were melted but a few made it to the public. One of them sold for $7,590,020 in 2002.
In 1986, the US mint started minting bullion coins. They would produce 4 different American Eagle gold coins, $5 tenth ounce, $10 quarter ounce, $25 half ounce and $50 ounce. Bullion coins go up and down depending on the price of gold.
If you are like me, and can’t afford to spend hundreds or thousands of dollars to purchase a gold coin, there is always silver. The only thing is if you are investing, go for the pre-1965 Silver Coins. Modern silver coins and commemoratives are nice to collect, but in many cases, their values have gone down since they were released.
Unlike gold, silver coins were released in circulation until 1964 and in smaller denominations from the half dime to the dollar. A popular silver coin for investing is the Morgan Dollar. There are some Morgans that are easy to get and others are a challenge. The lower mintage Carson City dollar are the one sought out.
For investing, go for the uncirculated coins over circulated coins. Besides Morgan Dollars, Peace Dollars, Walking Liberty Half Dollars and Franklin Dollars could be considered.
In 1986, the American Eagle Silver Bullion Dollar was introduced. As with the gold bullion coins, the value goes up and down depending on the current price of silver.
This is a no brainer. Investors look for rare coins like the 1916-D Mercury Dime, 1909-S VDB Lincoln Cent and the 1877 Indian Cent. However, not all low mintage coins are worth as much as you think. For example, the 1931-S penny was the second lowest minted Lincoln cent, but many people hoarded them in high condition back in the Great Depression. You might be able to get one in uncirculated condition for under $200. However, a 1914-D which had about 250,000 more minted than the 1931-S goes for $200 in good condition and at least $2,000 in uncirculated condition.
There are counterfeit silver, gold and rare coins out there. If it sounds too good to be true, it probably is. Play it safe and buy coins at coin shops, coin dealers and coin shows. Stay away from yard sales and pawn shops unless you know enough about the coin to purchase. Online auctions can be good, but look at the pictures carefully. I haven’t had a problem with online auctions, but for rare or gold coins, go for slabbed ones or encapsulated by a certification company like PCGS or NGC.
I hope this helps you with your coin investing
Just realize, this is my opinion in terms of investing. Other collectors may believe otherwise, but I think these three categories are a good way to go. If you think of anything else, please comment about it here.