MS-65s Show Strength in Good Times and Bad

5^th National Silver Dollar Convention

St. Louis, Missouri

November 8 – 11, 1984

MS-65s Show Strength in Good Times and Bad

By Hannes Tulving

Anyone can make money in a boom market, but succeeding while others are failing takes uncommon strength.  MS-65 silver dollars have exhibited just this kind of extraordinary tenacity.

During the 1980-83 recession, coin values plunged virtually across the board.  The few winners tended to be MS-65 silver dollars.  Between 1950 and 1980, these coins had appreciated at an average annual rate of 25 percent; there was no change in this pattern during the three subsequent years.  In fact, some dates skyrocketed during this so-called “bear market.”  For example, the 1879-S increased 187 percent, the 1882-S went up 240 percent, the 1925-P gained by 333 percent and the 1902-O leaped by an astounding 461 percent!

The steady appreciation of MS-65 silver dollars continues unabated to this day.  Why such dramatic staying power?  The answer can be found in the most basic economic concept:  supply and demand.

There is more demand for silver dollars than for any other type of coin.  And MS-65s are in very limited supply.  These two forces combine to keep prices on an upward course.

Demand for MS-65 silver dollar should continue strong for many, many years.  The reasons for this include:

• Recognition Among Novices.  People entering numismatics tend to buy coins with which they are familiar, and the silver dollar is perhaps the most recognizable of all U.S. coins.
• Literature.  More books have been written about silver dollars than about any other type of coin.  Such exposure fuels the public’s interest and provides collectors/investors with the background they need to make intelligent buying decisions.
• Availability.  Although gem-quality silver dollars are relatively scarce, they remain the most available of all MS-65 coins.  This insures stability and liquidity, two factors critical to long-term strength.
• Affordability.  Many MS-65 silver dollars are still priced below $300.  This makes them accessible to most of the 12 to 15 million collector/investors now active in the U.S.
• Collector Appeal.  The beauty and rarity of the MS-65 silver dollar makes it a favorite among coin collectors.  Demand for these coins therefore stays strong regardless of how the investment community is behaving during any given week.
• Price Structure Accessibility.  The easier it is to determine a coin’s current price, the more liquid that coin becomes.  The field’s leading price guides give more attention to silver dollars than to any other type of coin.
• Track Record.  MS-65 silver dollars have shown consistent strength for more than three decades.  Because people like to go with winners, MS-65 silver dollars should continue to enjoy buyer loyalty for years to come.

Combined, these factors give MS-65 silver dollars a strength enjoyed by few other investment instruments.  The continued imbalance between buyer demand and product supply points to continued 25 to 30 percent annual appreciation in both good times and bad.