Heads or Tales: Stocks vs. Rare Coins
Both the stock market and the rare coin market experience ups and downs, along with fads and cycles. While stocks and coins can be profitable, they both have periods that investors prefer to forget.
Is Jumping Ship Worth It?
Sometimes, newcomers to coin collecting wonder if they should sell all their stocks to buy coins, especially after hearing about high profits in coin investments and experiencing losses in the stock market.
I remember when around 2000, leading stock brokerages gave space to anyone, even those with little training, to try day trading. People used their savings or retirement funds hoping to strike it rich quickly, as illustrated by the media frenzy over rapid gains and losses in "dot-com" stocks. You ought to remember where this trend ended up leading.
It might be tempting to jump into a hot market trend, always consider the long-term stability and nature of your investments!
Here’s what you should consider when investing in coins:
Unlike stocks, most coins eventually regain much or all of their market price. They don’t face issues like liquidation or delisting, but also, they don’t provide cash dividends like stocks do.
Coins are great as passive investments when chosen carefully and held over time.
Stocks, however, typically require more active management. Investment favorites can quickly become outdated.
Both markets have distinct cycles and investment requirements. Investing in coins could provide significant long-term rewards, especially if you're looking for a less active investment strategy!
Coin Market Timeline
The stock and coin markets have had their fair share of bear (down) and boom periods. Despite downturns in the stock market during certain periods, the coin market often experienced growth.
The 1930s (Great Depression): Despite the economic downturn, the coin market saw great growth.
1946-1947: Coin market boomed.
1961-1962: Coin market boomed, highlighted by the rise in price of 1950-D nickels.
1966 and 1974-1976: Another boom period for coins despite bearish stock markets.
1981-1982 and 1987: Bearish periods in both markets, yet the coin market boomed again in 1987.
1990: Coin market interest surged in ultra-high-grade certified modern coins.
Early 2000s: NASDAQ hit its peak in March 2000 but then plummeted, reflecting a bear market (remember the dot-com bubble?). However, the Dow Jones showed resilience due to its composition of more seasoned stocks.
Modern Coin Market
As of 2024, the coin market has been strong, with increased interest not only in older coins but also in recently released U.S. Mint products. This indicates a healthy demand across different segments of numismatics.
High-relief silver coins, gold bars, and well-known bullion coins like the Silver Panda (pictured below) are among the top sellers, reflecting a strong market for both decorative and investment-grade coins.
Certain modern coins (unique and high-quality issues) have fetched record prices at auctions. For instance, the "At Dusk & At Dawn" American Silver and Gold Eagles (pictured below), struck by a former U.S. Mint Director, have achieved new record prices.
If you’ve read some of my other articles, you know I’m a real sucker for Gold Eagles!
Overall, the modern coin market in 2024 is characterized by active trading, strong prices, and broad collector interest, driven by both the aesthetic and investment value of coins.
A Song of Bears and Bulls
Pandas are a great segue into bears in general. Unlike the stock market where bears are seen as a bad omen, in the world of coin collecting, bears are actually quite popular and desirable.
Bear Coins
Several coins feature bears, like the 1925-S California Diamond Jubilee half dollar (pictured below) and the 1936 Oakland—San Francisco Bay Bridge half dollar. There's even a rare Civil War token issued by a Mr. Behr. The more bear coins, the better!
Interestingly, Theodore Roosevelt, well-known for his interest in numismatics, inspired the creation of the teddy bear.
Bears have recently gained some more popularity in Canada. I’ve seen a Canadian silver two dollar token (pictured below) featuring a lovely polar bear from 2018 and a golden Roaring Grizzly coin from 2016.
Bull Coins
Bulls are less common in coins compared to bears. A bull appears on a Hard Times token with the inscription "A FRIEND TO THE CONSTITUTION" and on tokens issued by Cincinnati restaurateur Lew Boman in 1862 and 1863 (photo below):
The 2004 Wisconsin quarter dollar depicts a cow, not technically a bull, but the connection is humorous as it suggests she might have had "a bull friend or two."
The Old Spanish Trail commemorative half dollar features a bovine skull, specifically called Cabeza de Vaca, which translates to "head of a cow."
A year ago, Canada finally supplemented its bear coins with interesting Bull of Clarence tokens, available both in gold and silver varieties, five years after the British Queen’s Black Bull was released in 2018 (pictured below):
Remember, in coins, bears can bring luck and interest, making them sought-after collectibles, so don’t hesitate to embrace the bear market in numismatics!