Finish the set and earn the reward

I was working on new price charts for the 2011 edition of North American Coins and Prices.

They were created 20 years ago for the first edition and now with almost 40 years of data reflected by the movement of the graphs, they tell an interesting story.

Coin collecting by no means is the royal road to riches. Average collectors can expect that overall values keep up with inflation or stay just ahead of it.

The coins that make the headlines for record prices do not reflect what average collectors would be buying over time and so cannot be taken as a proxy measurement for the overall success of average collectors. One lesson that might be drawn is the bulk of the value of sets is in the key coins and it is the price appreciation of the key and semi-key coins that keep collectors ahead of the game.

A 1914-D Lincoln cent in F-12 has gone from a retail price of just under $50 to just under $400.

A 1921-S Buffalo nickel in F-12 went from about $30 to $190 in the same time period while a 1923-S half dollar in XF-40 rose from just under $50 to approximately $300.

These are coins that average collectors were buying in 1972. They don’t depend on scarcity of high grades to propel values. Besides, who in 1972 would have been able to buy what turns out to be an MS-66 or MS-67 today before that grading scale was applied to all U.S. coins? Certainly not the average collector.

Some average coins haven’t done well. An MS-60 1921 Morgan dollar has never recovered from its $40 1980-1981 high. It is now just over $25, though that is about double the 1972 price.

Not too many average collectors had a budget for gold in 1972, but those who bought a 1908-D Saint-Gaudens $20 without motto in 1972 paid a bit under $100 for it in uncirculated (MS-60). It shot up to over $1,000 in 1980, but then backed off and only in the last couple of years has exceeded that level, reaching over $1,500. That’s a nice return on investment if you held it all 38 years, but if you stampeded into the market in the gold rush of 1979-1980, the return is far lower.

What does that tell us?

Well, the key issue is to collect full sets, because you cannot know which coins in it will turn out to be the top winners.

Putting a set together without the scarce dates might be all you can afford, but doing so takes much of the financial gain out of it.

So rather than do multiple incomplete sets, zero in on one and do it to the finish. The odds then favor your achieving an ultimate financial reward.