This article was originally printed in the latest issue of Numismatic News.
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Well respected collectors and numismatic commentators such as David Bowers and David Hall have publicly voiced concerns about the graying of our hobby and among certain series the aging of the collector base is likely a justifiable concern, but there are two important bright spots on the horizon whose impact will likely be felt for the next 30 years or more and the direction they carry the market may not be obvious at first glance.
The U.S. Mint is successfully using circulating collector series like the 50 state quarters, national park quarters, Presidential dollars, Native American dollars, Westward Journey nickels and Lincoln bicentennial cents to develop a new generation of collectors.
The Mint has estimated that 100 million U.S. citizens have or do collect these changing design series in various forms. That’s staggering market exposure by almost any measure and even if the number is a little optimistic it is training new collectors to expect a high level of design differentiation in their sets.
Much of the world has a design- and denomination-rich coinage history to draw from that stretches over thousands of years. They tend to stress collecting by type as a result.
It takes time for new collecting habits to show up in the broader market just as it took about 40 years or one generation for collecting by date to fully give way to collecting by date and mintmark. Similar changes are afoot now and it is showing up clearly in silver proof Washington quarters because they have had a little time to mature.
The present market value of the 800,000 1999 silver proof quarter sets is roughly equal to that of every silver proof quarter issued from 1936 to 1998 combined. If the new design-based quarter collectors were migrating back to pick up the early date-based issues they should be trading at an all-time high indexed to inflation, but nothing could be further from the truth.
Even America with its short coinage history and intentionally design static series has walked this road before. Oregon Trail, Arkansas, Texas and Washington Halves enjoy about the same number of series members as the $2.50 gold Indians do, but their extremely low mintage key dates never developed the way they should have because they were lost in a sea of design change that we call type collecting.
We don’t want series we collect by date and mintmark to become collected by type. That adversely affects prices.
Another source of collector growth is the public’s justifiable desire to own hard assets that are not paper promises issued by governments whose long-term financial commitments are nothing short of frightening. Silver gold and silver Eagles have been flying out of the Mint at an astounding rate lately into the hands of the public and many of these individuals are buying every year.
We don’t start collecting something until we have one of them. Buffalo gold buyers for example that already have part of their savings in 2007, 2008, 2009 and 2010 $50 issues are prime candidates to want at least one 2006 and 2008-W to go with them. Massive attractive populations in the hands of the public are a gift to any set because they are advertisements for the series that have the tendency to attract collector followings. Static design series that can be completed and have massive series populations will likely pull through the design tsunami successfully.
If you look over coinage history, it is clear that the greatest collecting opportunities tend to present themselves when a newly struck extremely low mintage type coin or a very low population member of a lengthy series with significant public exposure shows up. A couple dozen coins issued by the U.S. Mint in the last 15 years fit this description exactly and are moving from their infancy into the rapid growth phase of their life cycle.
At the time of series maturity over half of the entire series value is contained in the four rarest coins in the set. The time to pick tomorrow’s great key dates is while they are trading well below the 50 to 100 times melt commonly seen in mature series.
Yes, collecting will pull through just fine and part of the fun is learning to see great coins before they have great prices to go along with them and are still low risk.