A rising tide lifts all ships, and a rising coin market
lifts the prices of all coins, common and rare. My own preference, and the
advice I usually give, is to invest by building a meaningful numismatic
collection: one of each Morgan dollar variety, one of each different
commemorative half dollar design, one of each major design type of U.S. gold
coin, or some similar discipline. In this way a balanced holding is acquired,
the common as well as the rare, and when your collection is sold there will be
great enthusiasm among buyers. However, there is no question that accumulators
have also done well in many instances.
Ultimate
Consumer
Conventional wisdom has it that the ultimate
"consumer" for a coin is an individual who desires an individual
specimen for his or her collection. Without this consideration, there is no
reason why an MS-65 1892-S dollar, bid at $45,000, should be worth any more than
an MS-65 1881-S dollar, bid at $96. For that matter, there is no reason that in
the absence of a collector wanting to buy it, either coin should be worth more
than its melt-down or silver bullion value of just a few dollars.
The concept of coins going up in value because investors
are selling to other investors has always puzzled me, and I am just beginning to
sort it out. Imagine a world without coin collectors, a world composed of many
coin investors, but no collectors. Promotional hype would induce investors to
acquire coins, and if prices were rising, the increase in prices would prompt
still more buying and would cause further high prices. As long as new investors
came into the market to replace those leaving, prices would remain stable or
increase. Buyers without knowledge of coins, whose purchase desire was based
solely on hopes of price increases, are, perhaps, subscribers to the so-called
"greater fool theory," under which all is just dandy, providing that
someone else comes along tomorrow to pay a higher price.
It may be irreverent to suggest the "greater fool
theory," when the entire situation can be made to seem quite reasonable by
comparing it to real estate, an investment arena which has attracted untold
billions of dollars, far more money than has ever been placed in the coin
market.
