Should You Invest in Rare American Coins or Modern Issue Coins?

The rare coin market like any other healthy market has its ups and downs. Pre WWII coins have been around long enough to have an established market. The modern issue coins can and often have a flash-in-pan type following.

Rarity value in coins is in context to their market demand. If everyone in America became interested in silver coins, there wouldn't be enough of any one coin to go around. For example, the 1921 Morgan was produced in huge numbers. Close to 87 million, in fact. That's only around one 1921 silver dollar for every household.

Many modern collector coin issues are minted in relatively low numbers, but does that make them good investments? I consider many modern "rare" coins to be like jewelry. They have their intrinsic value in their precious metal content, but when you sell the coin, you might not get back the premium you paid for it.

The most risky modern "rare" coins I think are the ones hyped up in promotional material or catalogs. They often have a story about their conception or design.

Low mintage numbers may be given to indicate rarity, but more often than not, a conditional rarity is created because of numbers receiving a certain grade by a third party grading company.

PCGS and NGC seem to be willing participants in grading modern common coins to give them a conditional rarity and legitimacy for the seller. The seller then asks four to ten times their worth to see if the market will buy the hype.

If you buy coins like these at the advertised prices, you might have to wait for a long time to sell them at a profit. Chances are you won't have the promotional resources to package the coin so you educate/convince someone to buy your coin at a really inflated price.

Modern commemorative silver or gold coins are risky to buy at inflated prices. The commemorative market tends to forget the original reason for the coin being special, and often won't pay for that specialness in the future.

Modern silver and gold coins don't have the track record of the old established collector coins, which makes them somewhat risky as an investment. There are modern rare coins that appreciate in value fairly quickly, but I consider ten years to be a minimum track record for an investment coin.

However, if you have your hand on the pulse of future trends and can predict them with some accuracy, be contrarian. Buy the trend-maker coin and profit from it. Otherwise, simply buy the modern rare coin because you love it, and not concern yourself with future performance, because you don't plan to sell it.

I prefer American Eagle silver and gold coins directly from the mint. They have an established track record. The baseball coins may be a flash-in-the-pan coin. The promotional material of course says they'll sell for multiples of their issue price. They might... Then they might not. I won't take the chance.

Few modern commemoratives have become modern rarities. The 2001 Buffalo silver dollar, I think is one exception. It sold out quickly and now sells for multiples of its original mint price. The 2011 25th anniversary silver eagle set looks like another hit for those lucky enough to have gotten their order in early on the day of sale.

When there's frenzy over a newly released coin, and they actually do get multiples of their original issue price, you need to be on either side of the frenzy, not in the middle of it. Either be the first one to buy some ahead of the crowd, or patiently wait out the frenzy to see where the dust settles.

To discover more about coins: collecting issues, money management, investing in the rare and bullion coin market, and much more, I invite you to visit http://www.heritagecoingallery.com for videos and free tips on buying coins at the best prices.

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