By Q. David Bowers – Co-founder, Stack’s Bowers ……
In the latest (2019 cover date) issue of A Guide Book of United States Coins, the 1892 and 1893 Columbian commemorative half dollars are listed at $310 each in MS-65 grade. Get set to be surprised! At the height of a boom in the coin market in the spring of 1990 a MS-65 1892 was valued at $3,850 and a MS-65 1893 at $5,000!
How could this be?
What is the explanation?
Here goes: In 1986 the Professional Coin Grading Service (PCGS) made its debut, followed the next year by the Numismatic Guaranty Corporation (NGC). This became a dynamic influence, as investors who wanted to tap into the wonderful profits made by buying rare coins could now purchase coins in hermetically-sealed holders stating their grade. No knowledge was needed.
For many years, a fine collection carefully formed over a period of years always yielded an attractive profit when held for, say, a decade or longer and then resold. By 1990 I had been in the rare coin business since I was a young teenager in 1953 and had studied the market carefully and had handled many collections and rarities. I knew not a single exception to the profit rule!
Now, in 1990, there was no need at all to learn anything about numismatics, such as how to evaluate the striking, grade, and appearance of a coin. One did not need to own a Guide Book, subscribe to a magazine or join the American Numismatic Association (ANA). Why waste time doing this when certified coins could be purchased instantly with no knowledge required?
How exciting. By that time several mutual funds for coin investment had been formed, including one by Merrill Lynch. A new era beckoned.
Advisors often recommended commemorative coins. They had these two advantages: (1) Low mintages for most issues, and (2) nearly all are in Mint State. MS-65 coins were very easy to find.
The prices of commemoratives multiplied across the board. Numismatists who were interested in them stood at the sidelines as prices soared and were not buyers.
Then it happened:
New buyers became fewer.
Investors tried to sell, but hardly anyone would pay stratospheric prices. The prices dropped and then dropped some more, then fell off a cliff! Merrill Lynch compensated its investors and took a licking. Some investment-oriented companies went bankrupt.
The result is that today in 2018 commemorative coins of the classic era 1892 to 1954 sell across the board for fractions of their 1990 prices. It is a collectors’ market once again.
Each commemorative has its own story to tell. You might want to check out the various issues and acquire a few of interest. Unlike 1990, today you can “visit” the World’s Columbian Exposition on the internet and see many images of the buildings, exhibits, and other attractions—adding to the appeal of the coins.
Have a nice weekend!