Coins as an Investment 19


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.

Gold CoinsGold Indian Half-Eagle

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.

Silver CoinsMorgan Silver Dollar

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.

Rare Coins1916-D Mercury Dime

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.

Beware!

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.

You can get Gold CoinsSilver Coins and Rare Coins on Ebay.

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19 thoughts on “Coins as an Investment

  • Glen

    Having a small investment in coins is a good idea as part of an overall investment portfolio.

    As you stated, buyers must be beware. Besides counterfeit coins, there are many over priced dealers. One well-known talk show host promotes gold investments. Problem was, he was self-serving and had a “deal” with the dealer. The gold investments were rip-offs. Purchasers could go to other coin dealers and get much better prices.

    • Kevin Post author

      Good call! That’s what I forgot to mention, TV dealers and infomercials. You’re right, they are a ripoff. It is a wonder that people still buy from them.

  • Norah Jansen

    I love this site – anything collectible is of interest to me and I could almost hear Rick from Pawn Stars explaining about each coin as I read. 🙂

    It’s a pretty fascinating topic if you’ve got an interest and way more interesting than stamp collecting! Rare coins are only going to become more rare. Good luck with this. I think it’s got lots of potential.

  • Alec Terry

    Wow, I didn’t realize just how many different kinds of coins there were minted before the turn of the 20th century. It just goes to show that we as a a general public are not very well versed in our history.

    I also did not realize that there were $20 gold coins in circulation, I can only imagine how much one of those gold coins would be worth today. Because even back in the day, $20 was quite a lot of money!

    Great post!

    • Kevin Post author

      $20 Double Eagles go as far back as 1849. Being that there were many minted in San Francisco in the mid 1800’s, there were many Double Eagles in the old West. Before 1869, most of the gold was sent to the eastern US by boat, whether going all the way around South America, or walk across the isthmus of Panama.

  • Felina Danson

    Funny how I happened to read this article and instantly though of my grandpa who had passed away years ago. He hated banks with a passion and collected coins for as long as I knew him. Everybody used to make fun of him for his dislikes of banks, but his coin collection when he passed away was worth a lot of money, and none of the family expected it to be that much.. Thanks for a great memory.

    • Kevin Post author

      That’s great about your grandpa. I wonder what he had in his coin collection. I think more people are against banks today. I glad I was able to make you think of your grandpa.

  • Amberlee

    I really enjoy reading your blogs I feel like I learn a little about the American history (which is exciting when you are a non-American citizen.)

    After reading your post I was left wondering if the American Government ever made copper coins? I know they did in Australia and they had to stop producing them as the copper within them was worth more than the value of the coin.

    • Kevin Post author

      The US has had copper coins since 1793. They produced half cents and large cents until 1857. After that they made small cents. Just like in Australia, the US went from copper to zinc cents in 1982 because of the increase of the value of copper. I liked copper cents better because zinc cents seem to lose their shine quicker.

    • Kevin Post author

      The US has had copper coins since 1793. They produced half cents and large cents until 1857. After that they made small cents. Just like in Australia, the US went from copper to zinc cents in 1982 because of the increase of the value of copper. I liked copper cents better because zinc cents seem to lose their shine quicker.

  • Margarita

    Thank you Kevin for the review.

    If a coin is made of gold or silver it is obvious that it has value.

    However, I never understood how you can invest in rare coins, like how they are priced. It means that they have value only because like artifacts, they are old, have a history attached to them and rare. It means that the value is given, right? Say, for example, if you take a rare coin to Africa and ask some tribe chief to exchange it for food and shelter, they would’t take it, wouldn’t they?

    Please shed some light.

    • Kevin Post author

      Rare coins are not necessarily old. Not the same as artifacts. There are some that are under 100 years old like the 1932-D and 1932-S Washington Quarters. I have a 1998-S Matte Proof Kennedy Half Dollar which has a mintage of only 62,500 making it a rarity for this set.

      In terms of the African tribal chief accepting a rare coin, how would he know if it’s rare unless you prove it to him?

      • Margarita Ivaniuk

        I see. That was I meant. So, a rare coin only has value because it is given to it as opposed to gold or silver coin which has an internal value. Yes, African chief will not take it because it has no value for him or in the area where he lives.

  • Calvin

    I have to say that you site taught me a lot. So my question is does a bullion coin have that weight of gold in it? So does the $50 ounce have that amount of gold in it?

    Also what is your opinion on the plain silver coins that you still find in circulation such as the quarter. I know you can tell a silver quarter by looking at the edge and not seeing the copper on the side.

    • Kevin Post author

      The $50 Gold bullion coin is 1 ounce gold, $25 is half ounce gold, and so on.

      In terms of finding circulated silver coins in change, most dealers would most likely give you a price in terms of the amount of silver unless it is a key date. If you find a 1964 silver quarter in change, you could get get around 18% of the current price of an ounce of silver. In other words, it’s worth more than a quarter. You are correct about determining whether the quarter is a silver coin.

  • JonBro

    Anything I collect seems to never end because there’s always a subset to go after. Like silver coins with privy marks or 5 ouncers from a particular mint. Wish I would have sunk more $ into coins in my youth rather than all those baseball cards and comics.

    Investing in bullion a great if you’re willing to hold long-term. The prices shift quite a bit. For example, I used to hit the coin shop every Friday to buy silver ounces for $5. Those same coins now go for about $17, and got all up the way up over $40 a few years ago.

    If you can afford it and are willing to hold onto it, I think coins as an investment is a great diversification strategy.

    • Kevin Post author

      That’s great that you bought silver bullion. I’ve bought some in the past. Of course some of their values have gone down because the price of silver is low right now.

      I’m never sure what to collect either because there is so much that you can collect out there. I recently finished an MS-67 Wartime Nickel Set. I got the last one last summer and looked at it and thought of getting the 1942-P Silver Proof as well. I got that at a coin show last fall in Proof-67. I’m also thinking about doing a Walking Liberty Half Dollar short set. It would include 20 half dollars, of which I have 3. With the low silver price I think I can do it.

      With coins, I believe in collecting as well as investing. It makes it more fun and I’ve learned some US History along the way.