Collecting: The Hidden Investment

8^th NSDC

Oct. 29 – Nov. 1, 1987

St. Louis, Missouri

Collecting:  The Hidden Investment

By Chuck Koontz

Collecting, whether it be coins, stamps, bottles or Elvis memorabilia, is a reflection of human instinct.  While opportunities to express the instinct may vary, the instinct itself changes little.

When money was created to facilitate trade and commerce, an irresistible opportunity to collect something of value and beauty was born.  Coins have been a favored pastime ever since.

Many think the advent of the investor is new.  Nothing could be further from the truth – only the intent is new.  Collectors have been investing in coins for centuries – they just were not conscious of it until it came time to pass on their collections.  It was then they discovered what an investment the collections had become.

The reverse, as well, usually occurs with investors.  Even the most flint-hearted of investors seldom can resist the temptation to collect once they are exposed to the joy and beauty of rare coins and the many intrigues the coin’s history unfolds.

And it just may be that the investor-collector becomes the salvation of the coin-collecting hobby.  (Many people call it an industry).  Without collectors, regardless of their level of endeavor, the hobby would be composed of investors selling only to other investors, operating in a nouveau version of “the greater fool” theory.  Whereas coins ultimately must “fill holes” for the investor to make a profit, the true collectors can get along very nicely without the investor.  Better, in fact, because they will pay less for their coins.

What we may be seeing is the investor replacing the kind in the “hobby of kings.”  Dealers and true numismatists must nurture this phenomenon.  At least as important, they must continue to encourage paper boys and girls to spend their money at coins shops as they try to fill in the holes of their penny books.  For as they grow up and become investors, they again can become collectors.

And once again, it will be proven that the difference between men and boys is the price of their toys.

Actually, that phrase constitutes something of a misnomer in these days of equality and self-discovery.  Women also are finding their way into the coin-collecting business.

We definitely are seeing more women investing in rare coins.  While on the surface this may appear to be a non-traditional way for women to invest, when you stop to think about it, nothing could be more natural.  For some time now we have seen women moving into previously male-dominated domains, such as the safety forces, sports and all sorts of crafts.  So what could be more “normal” than for women to recognize one of the best places for their money?

We also are seeing many former bullion investors move toward rare coins.  At the very least, we see investors, who previously were true gold or silver “bugs,” who now are hedging their bets by splitting their investments between bullion and rare coins.  This is true even with some of the hard-core survivalists.

This is a positive event.  For some time I have believed that putting money into bullion was not an investment; it simply was betting that hard times would come.  Being a positive person, I prefer investing my money in rare coins.  That way, I know the hard times never will come.