Do you consider coins to be a good investment? The answer should be: “It depends”. For United States coins, there are many examples of quality collections that were assembled carefully and sold for many times their cost of acquisition. Famous collectors such as T. Harrison Garrett, Mr. & Mrs. R. Henry Norweb, Virgil Brand, and Louis Eliasberg built collections that set record prices when they were sold at auction. However, these collectors had an edge when it came to their investment in coins: that edge was knowledge. Each of these collectors had an eye for quality and an appreciation for rarity, and they assembled collections of desirable U.S. coins. Desirability is the critical factor in realizing a good return on a numismatic investment.
What to buy:
Now, if you have a budget of $10,000 to invest in a coin (or a collection of coins), what should you buy? Below are 10 suggestions, ranked arbitrarily, according to my perception of their desirability (from an investment perspective). The truth is that if you ask 10 different coin collectors for their idea of the best way to invest $10K, you are likely to get 10 different answers (including many items not on my list). But, in spite of this lack of consensus, I will plunge ahead and share my list with readers:
1. $5 Half Eagle Gold Coin (Heraldic Eagle, 1795-1807) MS60. These beautiful early gold pieces are ideal representatives from the early U.S. mint in Philadelphia. A heraldic eagle $5 in MS60 is a rare coin (the PCGS population for the entire series in all mint-state grades is less than 1000. These coins are also very beautiful objects. Demand for these coins is destined to outstrip supply for the foreseeable future.
2. Flowing Hair Dollar (1795) EF45. These historic U.S. dollar coins were minted for only two years (1794 and 1795) before the design was changed. Since 1794 dollars are famous rarities (worth much more than our $10K budget), we are really limited to a single year type coin (1795). Demand for this coin will be driven by silver dollar date collectors and type-coin collectors. The grade of EF45 fits our budget, but it is not the highest grade available. A mint-state coin would be more desirable (but, also more expensive). Dollars are the most popular U.S. denomination for coin collectors, and 1795 dollars are legitimately scarce in high grade (the PCGS population contains only about 400 coins between EF45 and AU58).
3. 1921-S Walking Liberty Half Dollar MS60. Walking Liberty Half dollars are a beautiful and popular series of U.S. coins. First issued in 1916, the coins were minted until 1947. The design (by Adolph A. Weinman) is a wonderful artistic rendition, featuring a striding figure of Miss Liberty carrying a flag on the obverse, and a bold upright bald eagle on the reverse. The most popular methods to collect walkers include building a full set (1916-1947) and assembly of a short set (1941-1947). The 1921-S Walker is one of the key dates to the series, and a coin in MS60 will have enough detail to fully appreciate the coin design. This is a rare coin in mint-state (the PCGS population in all mint-state grades is only about 100), and should hold its value (or, perhaps appreciate in value) in the years ahead.
4. 1793 Chain Cent VG8. Chain cents represent the very first coins produced at the fledgling U.S. mint in Philadelphia. The design, while somewhat crudely executed, is emblematic of both Liberty and Unity (the reverse design features a chain design with 13 interlocked links). The chain design was not too popular when it was introduced in 1793, and a more “fashionable” design with a revised portrait of Miss Liberty on the obverse, and an elaborate wreath on the reverse was substituted before the end of the year. This short production cycle, and subsequent attrition of the survivors have combined to make 1793 Chain Cents in all grades scarce. They are considered highly desirable by aficionados of early American cents, but are also eagerly sought by type coin collectors. Investors are interested in high-grade specimens, but recently the series has enjoyed hefty price gains across all grades. Furthermore, the future looks bright for these first mint products.
5. 1889-CC Silver Dollar AU58. Silver Dollars are the single most popular series of U.S. coins for collectors. There are more people looking for dollars than any other denomination. Morgan Dollars (minted from 1878 through 1904) feature a beautiful coin design in a large silver coin format. Virtually every collector owns at least a few Morgan dollars, and many try to build a complete set (all dates / all mint-marks). Fortunately, thanks to large releases of uncirculated dollars from Treasury vaults during the 1960’s, for many dates there are adequate supplies of high-grade coins. However, for many dollar dates, the treasury vaults did not contain any coins (or, only a small number). These scarce dates are the focus of intense demand from collectors trying to form complete sets. The undisputed king of the Morgan Dollar series is the 1893-S dollar. Right behind the 1893-S in terms of scarcity is the dollar minted at the Carson City, Nevada mint in 1889 (1889-CC). One added demand factor for the 1889-CC is the fact that many collectors prefer to form specialty “CC-only” silver dollar sets. An 1889-CC dollar in AU58 can fit nicely into an uncirculated set – the level of detail and the eye appeal will “make the grade’ for most collectors. The PCGS population of AU58 coins is 229, with about 500 finer. This coin is rare when one considers the number of people who want one.
6. 1856 Flying Eagle cent EF45. This coin is another historic numismatic treasure. Technically, the 1856 flying eagle cent is a pattern coin (regular mintage of flying eagle cents for circulation did not begin until 1857). However, a couple thousand coins were minted in 1856 (most are proofs). These were given to influential individuals as samples of the proposed new coinage. The “Red Book” (Guide Book of U.S. Coins) has long recognized the 1856 as part of the regular flying eagle series, and most collector albums contain a slot for the 1856, so it has gained general acceptance. The PCGS population report lists 300 coins in all grades. Ten thousand dollars will purchase an 1856 flying eagle in EF condition – if your budget would permit the purchase of a higher grade coin, it should be bought.
7. 1916 Standing Liberty Quarter AU58. The Standing Liberty Quarter series is often overlooked in today’s numismatic market. There are many reasons to consider this series, including the stunning beauty of the design, the small number of coins required for a complete set, and reasonable prices (for now) for uncirculated coins. The 1916 Std. Lib. 25c is the key date of the regular series. Its low mintage (estimated at only 52,000) insures its lasting rarity. PCGS has certified 100 coins in AU58, and about 600 in higher grades. Demand for 1916 Std. Lib. 25c has historically been strong, and if this series gets “discovered”, prices could move a lot higher.
8. 1891-S Morgan Silver Dollar MS67. This is a coin that is readily available in lower grades. However, at the MS67 level, the 1891-S is what is called a “condition rarity”. The two main reasons for including this coin on my list of top investments are: 1. Morgan silver dollars are the most popular U.S. coin series for collectors and investors. 2. Morgan dollar collectors are generally condition “fanatics”, and they compete vigorously for the finest-known coins. PCGS currently has certified a total of 7 1891-S dollars as MS67, and none finer. If you enjoy owning the “best”, and appreciate Morgan dollars, then this is a coin to consider.
9. A full set of Lincoln Cents (wheat-back, 1909-1958) MS62. The chief advantage of this investment pick is the amount of collecting pleasure that it can deliver. Most collectors love the “hunt” for the ideal coin, and they also like to “fill holes” in their collection. The Lincoln cent series (with wheat-back reverse) covers 50 years, and most years include coins from three mints (Philadelphia, Denver, and San Francisco). Mint-state coins for all the dates prior to 1930 are legitimately scarce. Only a few of the “key” date coins (1909-S, 1909-S VDB, 1914-D, 1922 plain, 1931-S) cost more than $100 each in MS62. Lincoln cents do not get a lot of “respect” in today’s numismatic market, especially coins that are not full mint-red. This may or may not change in the future. However, a full set of Lincolns in mint-state condition represents a serious collecting challenge, a solid numismatic investment, and an accomplishment that you can be proud of when it is done.
10. 1796 Quarter G. This final recommendation is also a dubious one. The 1796 is a solid numismatic rarity, with a long history of high demand and price appreciation. As a one-year type coin from the 18th century, it is desired by type coin collectors. The reason I call this a dubious recommendation is that $10K in today’s market will only purchase a 1796 25c in Good-4 (G4) condition. This grade is generally too low to be considered desirable, so realistically the coin in this grade does not represent a very good value. There is no certainty that there will be any demand for low-grade 1796 quarters in the future. However, this coin in higher grades (AU or better) is a very desirable item that should hold its value very well for many years.