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How did coins do in 2011?

A question frequently asked of coin dealers is how the rare coin market is doing. If you asked 10 different dealers, you would get 10 different answers. To try to take the subjective element out of evaluating the state of rare coin markets, indices were developed to help answer such questions.

A question frequently asked of coin dealers is how the rare coin market is doing. If you asked 10 different dealers, you would get 10 different answers. To try to take the subjective element out of evaluating the state of rare coin markets, indices were developed to help answer such questions.


The Salomon Brothers Coin Index was published annually from 1978 through 1990. Unfortunately, it only consisted of 20 U.S. coins of specific grades. This index contained too small a sample of components to match the state of the overall market, especially since it turned out that all of the coins were scarce to very rare. Once the component coins were disclosed in 1989, it became possible to manipulate the prices of a few coins to distort this index.

With expanding computer power, it became possible to use thousands of different dates, mintmarks and grades of coins in developing a more comprehensive index. However, even these had limitations as there was no way to accurately weight the indices for the volume differences between dates, mintmarks and grades.

From 1988 through 1989, I came up with five indices of my own to track different segments of the U.S. numismatic market. Two were titled the U.S. Investor Blue Chip Coins and U.S. Investor Better Date Coins. Two were labeled the U.S. Collector Generic Coins and the U.S. Collector Key Date Coins. The fifth was for the U.S. Large Size Paper Money.

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To try to neutralize the impact of a single coin realizing a huge price change while the rest of the market was stable, I assumed an even $1,000 investment in each component of the four coin indices. That way, if one coin went up 10 percent and another went down 10 percent, the net result would be no change – no matter what the actual price of the two component coins were. To eliminate any personal bias I might have, I used Certified Coin Dealer Newsletter (Blue Sheet) PCGS bid prices for MS-63, MS-64 and MS-65 grades for both investor indices. For the Collector indices, I used the Coin Dealer Newsletter (Greysheet) bid prices for the specific grade of the component coins.

The paper money index was established from a report I co-authored with Paul Manderscheid in August 1988. In this report, we analyzed the state of the large- size paper money market and predicted that it would have greater appreciation over the following five to 10 years then most numismatic niches. We prepared a list of 25 different notes in a total of 121 grades, each of which sold for a maximum of $500 in August 1988.

This Index was made from the retail selling prices added together rather than going the $1,000 invested in each component, so the statistical analysis is not the same as for the coin indices. Incidentally, to have purchased one of each of these 121 types and grades in August 1988 would have cost $21,755.

When the state quarter series debuted in 1999, I anticipated that there would be a surge in many common U.S. coins and sets, so I established indices for U.S. Silver Proof Sets 1950-1964, U.S. Regular Proof Sets 1968-1998 and U.S. Proof Silver Eagles 1986-1998. I did the same $1,000 per component as used with the earlier coin indices and again used the Greysheet bids for my data.

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So, now that you have been warned of some of the limitations of my indices, here is how they performed for 2011:

Proof Silver Eagles 1986-1998 +20.2%
Silver Proof Sets, 1950-1964 +12.5%
Investor Blue Chip Coins
Collector Generic Coins +10.3%
Investor Better Date Coins +1.7%
Large-Size Paper Money -2.7%
Collector Key-Date Coins -4.9%
Regular Proof Sets 1968-1998 -8.7%

While the spot price of silver at the end of 2011 was almost 10 percent lower than at the end of 2010, the average price of silver over the course of 2011 was 74 percent higher than the average 2010 price (roughly $35 in 2011 and $20 in 2010). The sudden silver price drop at the end of 2011 did not offset the fact that the top two performing indices were sparked mostly by higher silver spot prices over the course of the year.

What I find very interesting is that the Blue Chip and Generic coin indices both did as well as they did, outperforming all major global stock market indices for the year. A slight amount of the increase came from higher silver and gold prices, but there was also strength in coins where metal value was not a factor in the coins’ prices.

What I have generally observed (which means it is subjective rather than scientifically objective) over the years is that when rare coin markets are strengthening, the most common coins tend to lead the way. These are the very coins in the Blue Chip and Generic indices. Major marketers first promote the coins they can obtain in large quantities, which is one reason I think that common coins tend to lead the way.

Another anomaly was that the MS-65 component coins in the Investor Blue Chip Coin Index were up 17.6 percent, much better than the MS-64 (+7.4 percent) and MS-63 (+6.7 percent) coins. Yet, in the Investor Better Date Coin Index, the MS-63 component coins were up 2.6 percent, the MS-64s were up 2.8 percent, while the MS-65s were net down 0.4 percent.

By the way, here are some longer-term results of these longest-dated indices since their inception in 1988 or 1989:

Collector Key-Date Coins +315.1%
Large-Size Paper Money +267.2%
Collector Generic Coins +255.7%
Investor Better Date Coin -41.6%
Investor Blue Chip Coins -54.8%

The poor performance of the investor coin indices should not be taken as a fair analysis. The U.S. numismatic market hit a major peak at the Long Beach Show at the beginning of June 1989. Only about 12 percent of the coins in these two Indices are now at higher prices than in mid-1989, with a few of them resulting from higher gold spot prices. The demand in early 1989 was heavily skewed towards certified coins, so it should be no surprise that the uncertified coins and paper money have outperformed the slabs since then.

In general, I found the 2011 results to be encouraging for overall market direction in 2012. There is no obvious sector of the market that is likely to outshine the other niches, so the best advice I can give you is to look for coins that exhibit solid quality for the grade and that may have underperformed in recent years. Happy hunting.

Patrick A. Heller writes a commentary every Tuesday for the “Numismatic Update” e-newsletter distributed by Krause Publications. He owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Other commentaries are available at CoinUpdate ( He also writes a bi-monthly column on collectibles for The Greater Lansing Business Monthly ( His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

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