Invest in Rare Coins?

I’ve written many times about sticking with coins as a hobby, but leaving investments to true investment vehicles. Durable commodities including coins tend to do better during inflationary times when people don’t want to hold cash.

Does this mean coins are necessarily a bad investment? Not at all. We’re sitting on a great investment right now and anybody who succeeded in making money off of it did so by dumb luck. I’m not talking about an 1804 silver dollar or a 1913 Liberty Head nickel. They’re for the guys with the big bucks. I’m talking about the estimated 450 percent increase we’ve seen recently in some of the Mint sealed bags of 1999 Statehood quarter dollar coins. Top that with your Dow Jones average.

According to some coin dealers, any 1999 Delaware quarter you now encounter even in your pocket change is worth about 45 cents, a 70 percent increase from face value in less than one year. And we’re talking about a copper-nickel coin here, not some precious metal non-circulating legal tender commemorative or a Proof.

Last Spring, a $10 roll of Brilliant Uncirculated (Mint State 60) Delaware quarters was selling for somewhere between $30 and $45. Some banks may still have them available over the counter at face value! The U.S. Mint recently estimated there are more than 100 million children and adults actively searching their pocket change for the coins in the Statehood quarter dollar series. The Mint is estimating about 150 million people will be participating by the time the quarters “go Hawaiian” with the final coin in the 50-coin set in late 2008.Since some (more like “lots”) of these people will come on board later they will be looking for the early issues beginning with those of 1999.

All this could easily equate into further appreciation for anybody holding the early Statehood quarters. So far the lowest mintage coins are the 1999-D New Jersey quarters, followed quickly by 1999-P New Jersey and 1999-P Delaware issues. These are your so-called key date coins in the series as it stands right now.

Considering there are telemarketers clambering for the coins in bulk quantities the millions of pieces produced won’t last very long. The only way is up, according to many optimistic dealers and collectors alike.

We all like to trumpet our own successes, but consider that when the Mint placed 7 million of the 1999 Connecticut quarters for sale on the Internet the coins were sold out in four hours. This graphically illustrates the demand for the coins.

The bottom line is to collect for fun and enjoy it when you find later that lots of other people agreed with you, so many that demand outstripped supply. So many times we read about a coin that is a “sleeper,” something with a low mintage or survival rate that appears on the surface to be too cheap. There is usually a reason for this. The coin may continue to sleep because not enough people care about it. If there are 10 of it available in the market and only nine people who want it the price may go down. At this point it isn’t sleeping, its snoring!

The classic rarities get most of the press and continue to go up in value. It is possible the Statehood quarter series as a complete set may become one of these classic rarities people still seek hundreds of years from now.

You have to admit the Mint really hit the jackpot. What could be more American than a set of 50 coins representing every state in the Union? You can’t predict what the collecting public will want. If we could we’d all be rich. Since we can’t all be rich, lets enjoy the hobby and hope maybe some of the coins we bought simply because we like them might increase sharply in value.