Lets look at some of the trends in the rare coin market in 2015 and consider what to concentrate on in 2016.
Last year was an amazing year in the numismatic realm. Many high-end collections came to market and generated huge interest as well as dollars. As the highlight of the year, the D. Brent Pogue Collection took 35 years to amass and contained only 650 coins, but the presale estimate for the collection was $200 million. This collection boasted some of the rarest numismatic treasures known, such as the 1822 gold half eagle that the Pogue family purchased for $687,500 in 1982. It is the only piece available of the three known specimens; the other two are housed in the Smithsonians private collection. And the list of storied Pogue coins goes on and on: the proof 1804 silver dollar, the 1793 chain cent, the 1792 half disme, etc.
The first reason I mention the Pogue Collection is to show what can happen when the virtues of quality and patience are combined in coin collecting. Such a dual strategy is how you create a legacy that will exist long after the coins have been sold off! The second reason is to simply illustrate that the current numismatic marketplace is ready, willing, and able to absorb these types of rarities while clamoring for more. Todays market has a real appetite for quality, and the prices realized at the Pogue sale are proof of the markets strength!
Though 2015s coin shows were busy, they nonetheless weren’t overflowing with the kinds of bargains or rarities for which were all searching. I sensed that many of the rarer coins were being held in place rather than finding themselves on the open market, the presence of which in the past has always signified that the market was about to see impressive growth. I also believe that because of an exceptionally volatile year for the metals market, many people who possess rare coins feel far more secure with their current holdings, and in all likelihood are not just standing pat but are adding to their collections as the right pieces become available. It has certainly been a good year for coins, but I think we are in store for a more active market in the upcoming year!
Historically speaking, election years and their roughly two-year aftermath have always been beneficial to our market. With so many changes that occur in the first two years of a new administration, some investors tend to lean more toward the tangible side of the investment markets, especially with the volatility and backwardation seen in commonly stable environments. At the time of this articles writing, the Dow Jones Industrial Average was struggling to stay positive for the year, crude oil was down more than 50% from its start in January, and the national homeownership rate has dropped to its lowest level since 1993. Any one of these ominous indicators would typically have investors running for a safe haven other than cash, but when you combine these facts with a new administration in the White House, you often get the perfect storm for the rare coin market.
As for where to concentrate your numismatic efforts in 2016, I still stand by the ideal of quality over quantity! Try to purchase the rarest coin you can afford, but let me include a caveat to that statement because it can be easily misread. Regardless of your budget, this rule of quality over quantity applies; it doesn’t matter if you are investing $500 a month or $50,000 a month! Im not advocating that you shop outside of your price range; what I am suggesting is that you get the highest degree of rarity for your money! There are plenty of good buys in the market, but you need to be diligent in doing your research and make sure you have a trusted professional to help guide your way.
Keep an eye on 1) early date type silver (Bust dollars or Capped Bust half dollars); 2) proof coins from any series dated before 1910; and 3) anything from the Carson City Mint. I have found these areas to be profitable as well as consistently safe arenas for your money. Most of the coins in these three series are rare, sought after, and affordable! When buying early type silver or anything in the Carson City series, keep your eye out for any examples graded AU58, as they often are reasonably priced coins with quite a bit of eye appeal. I find them a better buy than MS60 or MS61 examples because the grading services tend to be very careful about what they grade as uncirculated. Therefore, focusing on AU58 will give you a much broader selection from which to choose, youll pay less for a coin that in some cases has better eye appeal, and overall youll get more for your money.
With a new presidential administration taking office in a little more than a year from now, 2016 is going to be the perfect time to take advantage of a market that is poised to move upward in 2017. In my personal opinion 2016 will be the year of the opportunist! Happy hunting!
Coin market analyst Douglas LePre is a senior portfolio manager at Blanchard and Company with a 30-year track record of proven results in the world of numismatic collecting and investing.