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 made its debut, followed
the next year by the Numismatic Guaranty Corporation. 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 value. 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 Coin World or Numismatic
News, or join the American Numismatic Association. 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 week!
