Coin collections also my hooby is it yours too?

[shandy]

Hello Mediator T

I have been collecting coins since I was child but I m still surprised to some of the above facts.

“The United States Mint estimates that the average life expectancy of a circulating coin is about 30 years, whereas paper currency usually only lasts for as little as 18 months.”

This fact raises a question in my mind, which is more collectible, coin or paper money?

Shandy

[Teresa]

Hi Shandy,

This is an interesting question. Coins tend to last. Paper money is relatively fragile. My point of view is that there are fewer collectors of paper money than coins. Fewer collectors means, on balance, fewer collectibles saved. If fewer items exist, this fact tends to push prices higher. I want to hear the opinion of others on this.

Teresa

[Mediator T]

Hello Teresa,

I have a different opinion. If there are fewer collectors, there will be less demand. Less demand means reduced prices in the future.
To satisfy my curiosity about the wisdom of face value investing, and the form it should take, I recently checked eBay for prices realized on two examples involving uncirculated coins and collectible paper currency from more than fifty years ago. I specifically looked at Crisp Uncirculated $1.00 bills from 1957, and two Brilliant Uncirculated rolls of 1957-D pennies.
The bills were selling for $7.00 each. The rolls were selling for $11.00 each, or $22.00 for $1.00 worth of the pennies at the 1957 bank teller price.
So much for the paper money sleeper argument!

Mediator T

[shandy]

Hello Teresa and Mediator T,

After seeing your posts, I do have another different idea on this. Fifty years ago, coin collectors could create a significant collection just by going through their change.
Back in 1957, it is true that millions of pennies were minted. But in 2007, billions of pennies are minted. Unlike fifty years ago there are now so many more new coins produced for every person who could use them that it is unlikely that they will ever be difficult to obtain.
Modern coins will remain common for a long, long, time – a bit like the overproduced Morgan Dollars of the late nineteenth century, which finally experienced a notable increase in value a century later in the bullish commodity markets of the late 1970s.
Could that happen with new pennies put away today? Copper is going up in price isn’t it?
Yes, copper has been going up over the years. So save copper pennies, not the pennies that are made today, which only have a thin coating of copper, and are made primarily of zinc. The last copper (actually bronze) cents were made in 1979.
Meanwhile collectible paper currency is deteriorating every day. Passing from grubby hand to sweaty palm, six months from now, most will be on their way to a government incinerator.

Shandy

[shandy]

Hi gals and guys,

US certified coins are the backbone of any major coin auction in the United States.

A certified coin is one that is deemed authentic, and assigned a grade, after examination by a panel of experienced coin graders employed by an organization accepted by the coin market.

Traditionally, a collectible coin was authenticated and graded by the seller. Since the late 1980’s, certification companies have provided a disinterested opinion that adds credibility to the value of a coin in the marketplace.

The added credibility is well founded. The major coin certification companies, for example the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC), employ expert numismatists to evaluate coins submitted to their services.

Coins are sonically sealed within heavy, tamper-proof plastic holders, known as “slabs” in the trade. Each slab bears identification, grading and tracking information.

Shandy