Independent Editorial by Daniel J. Goevert
Identifying US Coins with Bullish Futures
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Okay, let’s get something straight… I do not advocate the purchase of
United States coins strictly for investment purposes. Like most
traditional collectors, I believe coins are to be primarily appreciated
for their artistic beauty, historical connections, and the joy of
pursuing them. However, it should be no secret that a significant number
of us do add to our numismatic holdings while simultaneously peeking at
the payback angle, too.
In truth, there are probably substantial numbers of traditional
collectors who prefer to acquire coins destined to increase in esteem
and value over time; treasured heirlooms and a source of pride to be
passed from one generation to the next. On the flip side of this
equation, it seems implausible that anyone would buy a coin with the
hope or expectation to see it stagnate or decrease in value. Indeed, any
commentator who suggests the words “investment” and “coins” should never
appear in close proximity to one another is ignoring a heavily populated
segment of our hobby.
Now that we’ve established that it’s not numismatic heresy to seek
coins with strong upside possibilities, let’s get down to basics. The
guiding principle is simple: Any coin that has demonstrated solid,
consistent gains over a long period of time is likely to show continued
growth in the years ahead. Easily said, but as we shall soon see, not so
easily put into practice.
So exactly how does a one identify coins with a potentially bullish
future? The best clues are revealed by analyzing the retail value trends
over a long period of time for a given coin. Observing current prices
alone does not yield enough information to correctly evaluate
prospective price movements. What was the coin selling for two or three
years ago compared to today? Dig deeper, and find the market price for
the same coin 5-10 years ago. While you’re at it, get something from
20-30 years or more in the past, too. The more good data researched, the
more reliable will be your final conclusions. Now whip out your
spreadsheet and chart the numbers, or compute annualized rates of
return. Flat or negative trends are bad. Positive trends are good. Steep
positive trends are best. Any coin displaying a proven annualized growth
pattern of at least 5-10% over a span of many years qualifies as an
attractive option for the collector desiring coins headed for much
higher price levels a few years down the road.
During the course of my lengthy numismatic career, I’ve researched
the long term value trends of most collectible US coins. Thanks to my
trusty computer, I’ve calculated annualized compounded percentage return
rates and honed in on a handful of coins that have consistently beaten
the overall coin market averages. Unfortunately, the blue-chippers are
scarcely encountered. Perhaps it is this fact that explains why so many
well-intentioned hobby purists scorn the idea of blending coin
collecting with the profit motive.
Individuals whose objective is to satisfy their numismatic pleasure
by assembling a collection certain to be the envy of tomorrow’s
collectors must do their homework today. Remember to research historic
value trends and evaluate growth potential based on previous
performance. One last word of advice… never loose sight of the fact that
you are handling artifacts of America’s past, and that all of us are
merely their temporary custodians. Respect these coins and the history
they represent, and you’ll always discover new avenues of adventure not
found in most other investment opportunities.
Article author Daniel J. Goevert is the webmaster
of US Coin Values Advisor
www.us-coin-values-advisor.com. This site specializes in US coin
value trends, plus offers detailed coin collecting advice as well as an
illustrated history of the United States and the US Mint.
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