certified by PCGS. Because the supply is large enough to satisfy the demand of most collectors, the price of a common-date PCGS-certified MS-65 Morgan dollar has dropped to less than $200.
A similar situation occurs each year when the new government-issued proof sets hit the market. The collectors who are lucky enough to receive the first sets often sell them for a nice profit, because everyone wants to own one. Later, as the U.S. Mint releases more sets, the price drops because supply rises to meet demand.
Deciding What to Collect
Because money is a limiting factor, no matter how much of it you have, figure out how much you want to budget for your collection and then decide where to spend it. Here are some suggestions for interesting and challenging ways to collect coins:
Denomination: Try putting together a complete set of all the denominations issued by the United States. Start with the coins in circulation and then include obsolete coins like a half cent, a 3-cent piece, and a 20-cent piece — coins that most people have never heard of.
Type: You’ll find several types within each denomination. Half dollars, for example, include the Flowing Hair, Draped Bust, Capped Bust, Seated Liberty, Barber, Walking Liberty, Franklin head, and Kennedy types. You can collect by type within a denomination, or you can expand into other denominations.
Date: Collecting by date is a fun and affordable way to obtain every date for a particular series. You could easily collect a half dollar from every year they were minted since 1900. There’s no reason to pay extra for a rare mintmark; just pick the least expensive coin for the year, and add it to your collection. Not only will you have one coin from every year, but you’ll also have added several different types along the way.
Date and mintmark combination: Collecting every date and mintmark combination becomes a bit more challenging and expensive. Most series have what I call a stopper — a rare mintmark that can be prohibitively expensive. Believe me, you don’t want to attempt to collect a set of Barber dimes unless you have a lot of money. You may find and be able to afford every date in the series except for the extremely rare 1894-S, but you’ll need $1 million or more for a nice one! On the other hand, you can complete several series without breaking the bank. If you can’t afford the Barber dime set, try the Barber half dollars instead. The coins are bigger, and every date and mintmark in the set is affordable. Keep in mind that until recently, coins minted in Philadelphia had no mintmark.
Year: Many people try to buy every coin issued in the year of their birth. If you’re younger than 50, all you have to do is buy the mint set and proof sets issued by the government in the year of your birth, along with any commemorative coins issued that year. If you’re older than 50, you may have to search a little harder — but that’s half the fun of collecting coins, isn’t it? If you really want to go all out, try collecting coins issued in your birth year by other countries!
Staying focused
After you decide on a collecting plan, stick with it. Focus on your goals, and remain immune to the siren call of other coins. I know that temptation is hard to resist, but to conserve your resources and be ready when buying opportunities arise, you must remain strong.
Though I recommend sticking with your game plan, I don’t want to say that you can never change your mind. But there’s an important reason not to get distracted — a little thing called transaction costs.
Transaction costs are the fees you pay to get in and out of the coin market. If you’re familiar with the stock market, you know a different name for transaction costs: commissions. When you buy a stock, you’re charged a commission based on the price of the stock; when you sell a stock, you’re charged a commission again. Because the commissions come out of your pocket, you must figure them into your cost of the stock and the amount of any profits or losses that you make when you sell the stock. In many cases, commissions can eat up all your profits or enlarge your losses.
Transaction costs are part of numismatics, but not in such an obvious way. In numismatics, transaction costs are baked into the buy/sell spreads (the difference between what a dealer pays for a coin and how much they sell the coin for). Buy/sell spreads are much wider than they are in stocks. The buy/sell spread on a $100 stock may be 50¢, for example, but on a $100 coin, the spread may be as wide as $30. Suppose that you buy a coin for $100. Ask the dealer what they’d pay to buy the coin back in a week. If the buyback price is $90, you’re facing a potential loss of $10. Therefore, the market has to go up $10 just for you to break even on the coin.
Thinking long-term
Most big-name coin collections were formed over a long period by people who had a clear vision of what they wanted to accomplish. By approaching coin collecting with the same attitude, you can make your experience with coin collecting just as enjoyable and successful as anyone else’s.
Two areas are of primary importance when you’re developing your long-term view: price trends and opportunities. If nothing else, these two areas offer hope for the collector who may otherwise decide that finding certain coins is impossible. Patience may be its own reward, but a long-term view in coin collecting can make or save you money and open opportunities that are most certainly real and possible.
Long-term price trends
Looking back at the history of coin collecting, you’ll see a general upward trend in coin prices. Just like everything else in the world, coins cost more today than they did 50 years ago. Down the road, you can expect higher prices, but you can’t bet on them.
Long-term opportunities
The longer you’re active in collecting, the better your chances are of acquiring the rare coins you need. Sometimes, the opportunity to purchase a coin is rarer than
