Monday, March 16, 2009

Investing whats left into something tangible

This post is for those of you who still have something in your 401k, stock or you took your money out of the bank and put in your mattress.

One asset that will not go up and down like buying bullion gold or silver is numismatic coins. U.S. COINS. Now if you are going to buy numismatic coins DO NOT BUY GOLD COINS. They are tied to the price of gold on the low end of the market. What I mean by this is that lets say you buy a common date $20 GOLD Liberty that is in circulated condition. If the price of gold drops to $700.00 an ounce and you bought it at $929.00 an ounce the value of the coin will drop accordingly. Now you will also pay a premium for a coin of this type around $100.00 or more.

Your best bet is to buy KEY DATE coins. Coins that are of low mintage basically. These are but not limited to the following. They are not tied to a bullion spot price either. Even the silver coins in the key date category do not depend on the silver price for their value.

pennies 1909 s vdb, 1911s, 1922 plain or no mint mark (no D mint mark D=Denver), 1924D

nickels 1913s, 1914d, 1915s, 1921s, all buffalo nickels

dimes 1916d, 1921, 1921d, mercury dimes

quarters 1932d, 1932s Washington quarters

halves 1916, 1916d, 1916s, 1921s, 1938d, all Walking liberty

$1 1888s, 1893, 1893o, 1894o, 1894s, 1895o, 1895s, 1902s, 1903, 1903o, 1903s, and any of the CARSON CITY MORGANS mint mark CC, all of these are Morgan type $1

PEACE $1, 1921

This list only covers modern coins not the older coins that are less familiar to you. Also I have not included odd denomination coins. No error coins are included either such as the 3 legged Buffalo nickel, any double die coins(coin struck twice and letters or date doubled in process), or small or large date varieties, nothing that would be considered an error. I also did not include any KEY date coins that start at $1000.00 in the GOOD grade category for obvious reasons. Most of these coins are low mintage coins or from low mintage mints such as the Carson City dollars(these gained notoriety in the 1980's when the mint found many bags of them during an inventory. Big news back then. Mint put them in a Slab (plastic case) and they went crazy in price. They were the must have coin and still have a good collector value.

Now I know if you do not have any coin collecting knowledge how can you buy these and know what you are getting is what the dealer says it is. Make sure that with any of these key date coins that they come in a SLAB from either PCGS (Professional Coin Grading Service)or NGC (Numismatic Guaranty Corporation) There are others but these in the opinion of most are the best. The gray sheet web site lists the % increase of these companies graded coins PCGS UP 78.06%, NGC up 74.95%. No other grading companies are in the 70% range. See next paragraph for GRAY sheet info.

The next thing is how much is too much for a slabbed coin. You can get what is called the GRAY sheet. But it is located at www.greysheet.com The cost for 3 months is $31.00 for 19 issues and worth every penny. Cheaper by the year and two year subscription etc. Do not buy before consulting this sheet. Coin books you can buy at book stores or use at the library or magazines DO NOT have current value. They only can give you mintage, and basic info, NOT current values.

Now what grade to buy. The better the grade of course the higher the price you will pay. I have a theory on this and is only my idea so come up with your own. I would buy the best you can get but I would avoid the highest grade. Here's why, lets say you want to sell your graded coin later. If you paid X and there are fewer buyers who can afford X then you have limited the number of available buyers. A good mid grade say EF (extremely fine) depending on the coin will still be priced so Joe the plumber can buy it to add to his collection. In the higher grades there are fewer people that can afford them. On the other hand the higher grades will appreciate faster so there is a give and take on what to buy. The coins that may only reach a price of say $500.00 or $700.00 at the highest grade would be a good buy since most collectors will have that amount if they really want it.

Now I have not mentioned any Proof coins here. Proof coins are stronger strikes and start with a premium price. The 1936 proof set (1st set of 5 coins but others in earlier dates as single coins are available at a HUGE PRICE) sold for I believe $1.85 when it came out and sells for around $7,500.00 now. Proof sets have a sheet price also and these go up depending on demand and availability. Do a search for the 1936 proof set and see what I mean.

Now any of these that you buy will be higher price than the sheet price since the seller wants to make a profit on them. You must use your own judgement on how much more than the sheet price you want to pay.

Well I think that will give you the basic info and the rest is up to you. I am not giving any guaranties on any of this but I would say the chances of these types of coins going down appreciably is slim. Just stay clear of any gold numismatics since some of the price is tied to the gold spot price. Only the really rare gold coins will not be affected, such as the 1907 HIGH RELIEF $20.00 ST. GAUDENS to name one. This type of coin is for the BUFFETS of the world even in the lower grades. Upwards of the HIGH 5 figures and up for one of these in the upper grades.

Remember do your homework and get a gray sheet before buying anything.

Good luck and put that money in something safe even if you do not choose coins.

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