By Susan Headley. Coins Expert
Here's my disclaimer, to keep all the lawyers happy: "Past performance is not an indication of future potential values. Any opinions expressed here are just that, an opinion and they reflect my personal buying preferences for investing in coins. These opinions are not meant to denigrate or devalue any company's fine offerings, which may or may not increase in value over time ."
My #1 Worst Coin Investment - TV Shopping Show Dealers and "Mints"
Number One on my list is the TV shopping show dealers and premium "Mints" out there that sell nice looking commemorative coins for premium prices, but that have no value beyond their bullion (if they have any) when you must eventually sell them. Some of these "Mints" sell on the TV and cable-based shopping channels, and the prices they charge when they do sell genuine U.S. Mint coins are nearly always several times higher than the price the coins would cost from a normal coin dealer !
These shows rarely sell anything that can't be acquired elsewhere more cheaply, so don't impulse buy from these shows! Do a little research and you'll see the same Silver Eagles at $2 to $4 over spot price from major traditional coin dealers.
Most of the Uncirculated Morgan Dollars I've seen TV shopping show dealers sell for $300 each can be purchased from a normal coin dealer for $40. Never buy coins from TV shopping shows!
Tip: Don't miss my special warning about Obama coins !
My #2 Worst Coin Investment - National Collector's Mint
Number Two on my personal "do not buy" list are coins issued by the National Collector's Mint.
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The U.S. Mint has issued warnings about this company's misleading advertisements in the past, particularly its "Freedom Tower" coins. National Collector's Mint ads imply that Freedom Tower and other coins have meaningful amounts of precious metal in them when they do not.
In addition, despite the perception they often give to the contrary, nothing this "mint" makes has any association whatsoever with the genuine U.S. Mint, and it is my opinion that the coins they sell are, and will remain, virtually worthless as an investment collectible.
My #3 Worst Coin Investment - Franklin Mint & Kin
Number Three on my list of "do not buy" coins is those from the Franklin Mint and other premium collectibles mints (such as the Bradford Exchange, etc.) They are aggressive marketers who do sell genuine bullion coins (sometimes) but their coins usually do not have any after-market value among coin collectors and investors.
You'll typically pay $45 plus for a one ounce silver coin that is only worth the value of its silver bullion when you go to sell it. (Silver bullion is at about $11 an ounce as I write this.) Beware of crap like the Franklin Mint's colorized Obama coins !
My #4 Worst Coin Investment - Spurious Sets
Another bad investment type are "spurious set " coins. This is another popular TV shopping show product, plus they're found in magazines and swap meets quite often. "Spurious sets," by my definition, are sets that are put together out of lower grade
and/or common coins according to some kind of theme.
The coins are usually placed in fancy plastic holders, with nice quality packaging, and then you pay $38.99 for a set of five coins that are worth $2.99 just because they were all minted during World War II, or the Vietnam War, or because they're from around the world and commemorate Marilyn Monroe or some sort of cartoon character.
Such coins are usually genuine, and will probably appreciate in value, but they probably won't be worth what you paid for them anytime during the next five generations! These are a favorite of dealers like Littleton .
My #5 Worst Coin Investment - Coins With Crap on Them
The final type of coin among my top five worst coin investments are modified coins, such as genuine U.S. Mint products that have been altered by adding holographic stickers or coloring. These coins are generally considered "damaged" by serious coin collectors. and you will only get the bullion value when you go to sell them, if that. I have heard of dealers discounting them because of the added impurities that the paint and other crap applied to the coins adds to the metal.
The Best Types of Investment Coins
According to many experts, the best type of investment coins are rarer, key date coins issued by the United States, in the best grade you can afford to buy them in. If you can't afford to shell out $2,000 a coin to buy key dates in high grades, then buy common coins in the finest grades you can.
Lower grade, common coins have historically not appreciated as much in value as key date coins do, so they are probably not a good investment choice (although they're great for filling up the holes in albums, especially with kids helping out!)
In general, I collect pre-1965 90% silver U.S. coinage, and silver world coins in high grades, and I think they are excellent choices for the average person on a tight budget. I also believe that most types of U.S. Nickels are very undervalued right now, as well as later date (2006 through 2008) U.S. Mint Uncirculated sets. The mintages for these recent sets are extremely low! The 2008 Proof set is also a big winner. For obsolete coins, most Walking Liberty. Franklin, and silver Kennedy Half Dollars are undervalued according to many experts, but only buy high grades.
A final area of coin investing to consider are the bullion coins. especially coins that are traded at close to spot price (as opposed to Proof Silver Eagles and other premium U.S. Mint offerings.) With the growth of China and India and the likelihood that they will become "superpowers" within the next generation, all precious metals are expected to rise over the long term. Copper, in particular, is expected to boom compared to current prices.
Disclaimer - The advice given in this article is advice that I personally follow in collecting coins for investment purposes. It is not meant to be a guarantee that any of my advice, should you follow it, will earn you any money in coins in the short or long term. Nobody can predict the future, not even me. ;)