Collector-Investor Do You Have A Plan?

May 3, 2012

by Tom Pilitowski (U.S. Rare Coin Investments)

Hi, I’m Tom Pilitowski, coin dealer and owner of US Rare Coin Investments. I have been in what is known as the retail end of the coin business for many years. What that means is that I deal directly with the public. In the 30 or so years I have been engaged full-time in the coin business with positions ranging from buying scrap precious metals and coins from dealers and precious metals buyers in NJ in the late 70’s,  sole proprietor of small shop on main street in Belmar, NJ scratching to make a living in ’81  to a top producer at the world’s largest rare coin firms then on to building a successful open to the public business in 1991.  Probably 75% (or more) of that time has been spent dealing directly with the public. Whether they are collectors, investors, or those who consider themselves a combination of both, these are the individual people who make up the largest part of my business and career. I couldn’t imagine being in the coin business wearing any other hat.

Over the years what became apparent to me was what I considered  the relatively small percentage of collectors/investors that seemed to have any real plan as to what they were doing with coins and seemed to be sort of wandering all over the place without any real set plans or direction. Now this is to be expected somewhat in the beginning but at some point it’s a good idea to follow a plan or strategy which includes having at least a basic idea of what that plan is going to eventually cost, the approximate time for acquisition (or liquidation but that’s for another time) and the sooner the collector or investor has that understanding the better in my opinion. You’d be surprised how many folks start a collection of something like Saints only to discover later there’s dates that cost more than a common date and abandon it all at that point of discovery! I don’t think you can have too much information.

For years, I also have maintained and expanded a very large website with millions of dollars in ever changing and diverse inventory of some of the best coins in the world while also supplying a considerable amount of information including one of the most targeted and informative rare coin archives in the business. I’ve met many nice people via this website who I may have never met via more conventional ways and I’ve helped assemble collections ranging from a few single coins to multi million dollar collections of proof gold, early and better date coins of all kinds and I’ve been called upon to help liquidate millions of dollars in rare coins ranging from single gold coins to million dollar collections of US gold.

Something that I never understood was how people could spend huge amounts of money, sometime big percentages of their retirement capital on coins and fail to ever develop a clear, concise, cohesive strategy or plan for buying or selling rare coins. I take great pride in working with those people in developing a direction and sound footing with something they can see the completion of and enjoy the benefits of owning. There’s huge amounts of information to be had so obtaining information in better dates and rarities should not be intimidating at all.  I have also helped many collectors, as well as investors develop a plan even helping one of the more famous ones become the motivation for NGC to develop a new registry of early gold coins.  However one doesn’t need to put a complete set of US Quarter Eagles from 1796 – 1929 to have fun or put away for the future and it may even be somewhat  counterproductive for a new collector or investor to take on anything so complex until he’s gained some experience and is working with a specialist or two. There’s a multitude of mini sets or mini missions undertaken that can be assembled that are fun and exciting and can range from the affordable to quite exotic and expensive and everything in between and can help quench the thirst for history, adventure, art, commerce, trade, finance and all the things that numismatics is about.

A story I was told long ago regards to finance and saving, right from a man of the cloth’s mouth. Fill the Barrel and Live off the overflow. Wise words of sound advice for long term retirement planning. One can look similarly to their coin collections or nest egg of gold and silver coins. Strive to get the better coins, the rarities, the tougher to aquire coins of the series first, and then the commons. Once you’ve got the hard part down the rest is easy. Think of it as filling the barrel.

Planning can also help with intelligently timing the purchases of coins for financial gains and these coins aren’t always rare but scarce with something else going in the coins favor…history. In recent years for example we’ve witnessed price increases for those common 1861 Double Eagles which have been quite significant and far above and beyond the price of gold. Collectors who purchased these coins in the past few years have seen rather nice returns on their investments while having  fun too. Interestingly at the same time there has been a steady flow of people acquiring these coins, assembling 1861 Gold sets which are are a pretty neat set of American Civil War gold coins to own and in the midst of the 150th anniversary of the Civil War. CAC’d specimens of this common date double eagle are not so common with only 98 specimens being approved by CAC as of 12/2012 out of thousands graded. A CAC’d specimen of this first year Civil War gold seems like a fun coin to own. Some ideas for smaller affordable sets could be mint state Indian quarter and Half Eagle sets, a single specimen or example of the Type I, II, and III Double Eagles purchasing high grade and/or better date examples for each specimen, type sets of all kinds from early gold and civil war to Proof gold in singles type sets and collections. There are multitudes of ways to enjoy both the collecting and investing aspects of coins and planning and developing a plan are just the beginning.
With CAC we are witnessing huge differences of opinion in populations of solid for the grade coins. While there will always be disagreements of some kind, one thing we are in agreement with is the overall consistency of CAC’d quality coins and it shows in the premiums paid for many of these coins which can run into the double digits. In the cases of early coins CAC’d specimens account for only 10% or less of the populations of the 2 major grading services. Some of these differences particularly in the realm of early coins have been well known to early coin specialists for a long time and the fact that CAC is uncovering these facts is surely great news for the buyer of real quality. While surely these numbers will change in the future they are telling for the present and good planning for the future will include these coins in a sound collection or diversification in an investment portfolio.  David Hall developed the famous ”Box of Twenty” and certainly this could be a fun and challenging investment, a Box of Twenty CAC’d coins. Now that could be a good investment too!

In conclusion, develop a plan of action and stick to it. Find and work with a dealer who has extensive experience with the types of coins that interest you. Educate yourself with the investment of information. There’s a whole world wide web out there to be explored, great books that include specialized references for just about any series of coin that interests you, and  there are great book dealers and other great numismatic reference sources. There’s auction prices realized and various price lists to use in pricing coins.  In short there are plenty of good reasons for you to have a sound plan of action which can lead to more than just returns on investment over the years ahead.

Numismatically Yours,

Tom Pilitowski


About Tom Pilitowski

Tom Pilitowski, US Rare Coin Investments is a Rare Coin Dealer, Gold Coin Dealer specializing in Rare Coins, Gold Coins and Silver Coins since 1979. Tom Pilitowski has been involved in coin collecting since childhood. There are virtually no areas of American numismatics that Mr. Pilitowski has not explored, or has had experience in and over the years, Mr. Pilitowski has been successful in not only surrounding himself in the most astute and influential circles of coin traders, numismatists, collectors and investors but became one, who is looked upon by some of the most astute buyers as a source of knowledge, information and inventory acquisitions.

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