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Coin Collecting Strategies – Eight Tips on Buying United States Gold Coins

By Doug …….
As a specialist in the area of United States gold coins, I often find myself giving “tips” to buyers. Some of these seem pretty obvious to me while others are kind of clever and maybe not so obvious. Here are coin collecting strategies with some specific tips,  with a bit of pertinent commentary.

1. If you are a gold coin specialist who is worried about potential hoard coins hurting the value of pieces in your collection, there are a few things you can do as a safeguard. First, stick with coins struck prior to 1890. Most of the gold coins expatriated from overseas appear to be dated from 1890 onwards. Coins struck earlier, especially those before 1878, seem a lot “safer.”

Coin Collecting Strategies - US Gold CoinsSecond, limit your exposure by not buying very high grade coins. The collectors who owned high-grade 1857-S double eagles before the S.S. Central America was discovered got killed afterwards. But if you owned a nice AU example, your downside was limited. Third, you could stick with lower denomination coins. Hoards of gold dollars, quarter eagles and half eagles seem less frequent and dramatic than those with eagles and double eagles. But to those collectors who live in fear of hoards, I’d tell them to get over this and just buy what appeals to you.

2. By the grade before the big price jump. What I mean by this, if you have a choice between an MS64 double eagle priced at US$3,500 and an MS65 priced at $25,000 I would always buy the lower priced example, especially if the population is high in the lower grades. As an example, if there are seventy five examples of the $3,500 MS64 with just five better doesn’t it seem like that at least a few of the high-end 64s could inflate to MS65?

3. Nearly every collector who works on a series builds it the wrong way. It seems to me that all collections should have the keys be the best coins in the series while the common dates should be nice but not overblown. Instead, most collections skimp on the keys but overdo it on the commons.

Let me give you an example.

If you are working on a set of Dahlonega quarter eagles the coins you should “overdo” are the legitimate rarities like the 1854-D, 1855-D and 1856-D. I would stretch on all three and buy the nicest ones I could find. On the other hand, I would be content to purchase nice, original AU55 or AU58 examples of the common dates like the 1843-D, 1844-D and 1847-D and sink maybe $5,000 per coin into these three issues.

4. Always use a 5x glass when you are making a buying decision. Just recently, I bought a Charlotte half eagle at a coin show. It was in an old green label PCGS holder and it looked great to the naked eye. I made an accepted offer and never used a glass to look at it. When I got home and was ready to break the coin out to regrade it I put a glass on the obverse and noticed a deep, detracting scratch that had naturally blended into the surfaces. Yes, you may have great vision and you may be a really macho guy but use a glass whenever possible.

5. Buy coins with good eye appeal. Unless we are talking about an amazingly rare issue like an 1854-S quarter eagle, there is no reason to buy an ugly coin. And I would include damaged coins when I am talking about coins that lack eye appeal. As time goes by, I am noticing that fewer and fewer 18th- and 19th-century United States gold coins have good eye appeal. By “eye appeal” I mean a coin that is pretty; one that makes you stop in your tracks, look at it carefully and maybe even take a deep sigh. I can pretty much assure you that when you go to sell your coins, the ones with good to great eye appeal are going to be the ones that cause the greatest commotion.

6. First impressions are usually correct. If you get a coin shipped to you by a dealer and your first reaction is “yuck” or “um… I don’t really like that” you should pass. Nearly every major mistake that I have ever made as a buyer has been convincing myself that I “liked” a coin when, in fact, I really did not.

Coin Collecting Strategies US Gold7. Price buyers wind up with mediocre collections. Really nice coins with good eye appeal are really hard to buy right now for a number of reasons. If you are a buyer whose is driven by price alone I’m guessing you either buy modern coins or you haven’t had much luck lately buying. And if you are a cheap buyer who puts in low bids at auction, I’m guessing the only coins you are buying are the dark, ugly, low-end pieces that those of us who like nice coins wouldn’t buy no matter how cheap they are. You aren’t going to have fun when you go to sell your coins. But don’t take it from me; as an experiment post a few of your “good deals” on a message board to try to sell them to the local dealer….

8. If you are buying coins as an investment and expect to turn them over quickly to make a profit, there are a few things you should know. Rare coins have a fairly sizable entry/exit fee. If you are buying from a typical retailer, you are probably paying at least a 15-20% markup. And when you go to sell your coins, whether it be to a dealer or through auction, you are probably paying in the area of 10-20%. So even if you are buying and selling through good sources, you are talking about values having to go up 25-40% just to break even. That’s why I don’t personally tout coins as an investment and when someone does ask me about coins in this regard, I stress that they really need to be held at least a full market cycle (or five to eight+ years).

Doug Winter Numismatics, specialists in U.S. gold coins

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About Doug Winter

Doug_Winter2Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was ten years old,  buying and selling coins at conventions in the New York City area.

In 1989, he founded Douglas Winter Numismatics, and his firm specializes in buying and selling choice and rare United States coins, especially US gold coins and all branch mint material.

Recognized as one of the leading specialized numismatic firms, Doug is an award winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and exceptional eye for properly graded and original coins has made him one of the most respected figures in the numismatic community and a sought after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality and fair and honest pricing.  Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small.  He can be reached at 214-675-9897.

Doug has been a contributor to the  Guidebook of United States Coins (also known as the “Redbook”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins,  Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues

In addition he has authored 13 books on US Gold coins including:

  • Gold Coins of the New Orleans Mint: 1839-1909
  • Gold Coins of the Carson City Mint: 1870 – 1893
  • Gold Coins of the Charlotte Mint: 1838-1861
  • Gold Coins of the Dahlonega Mint 1838-1861
  • The United States $3 Gold Pieces 1854-1889
  • Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
  • An Insider’s Guide to Collecting Type One Double Eagles
  • The Connoisseur’s Guide to United States Gold Coins
  • A Collector’s Guide To Indian Head Quarter Eagles
  • The Acadiana Collection of New Orleans Coinage
  • Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
  • Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
  • Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis

Finally Doug is a member of virtually every major numismatic organization, professional trade group and major coin association in the US.

If you are interested in buying or selling classic US coins or if you would  like to have the world’s leading expert work with you assembling a set of coins? Contact Doug Winter at (214) 675-9897 or by email at [email protected].

Doug Winter
Doug Winter
Doug Winter founded Douglas Winter Numismatics (DWN) in 1985. The nationally renowned firm specializes in buying and selling rare United States gold coins. He has written over a dozen books, including the standard references on Charlotte, Dahlonega, and New Orleans gold coinage, and Type 1 Liberty Head Double Eagles. Douglas has also contributed to the A Guidebook of United States Coins, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars, and Andrew Pollock’s United States Pattern and Related Issues. He is a member of the PNG, the ANA, the ANS, the NLG, CAC, PCGS, and NGC - among other professional affiliations. Contact Doug Winter at [email protected].

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  2. Gold is the universal currency per excellence and has traditionally been a popular option for speculation, investment and savings purposes.

  3. Nice article. Re: number 8 on your list. As a very, very part time collector (of silver), and as an ebay Power Seller, I can tell you that to resell even on ebay will cost 15-20%. I have been tempted to sell some of my “junk” silver coins, but balk at the cost of doing it. When buying more silver, I have to remind myself of the resale costs involved to make a profit.


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