The Coin Analyst: Classic vs. Modern: Both Kinds of Coins Are Rewarding to Collect
by Louis Golino for CoinWeek
The community of people who actively collect coins includes those who are mainly interested in classic coins, those who focus primarily on modern issues, and those who collect both.
For the purposes of this column, classic coins will consist of American coins issued before World War II such as Morgan and Peace dollars, Walking Liberty halves, Barber coinage, Standing Liberty quarters, and earlier coinage like the Bust and Seated Liberty series.
Classic coins certainly also include ancient, Medieval, and other very old coins, but since I am not that well versed in such material, I will limit this discussion of classics to American issues that are often called classic or traditional collector coins.
Modern coins includes everything from commemorative issues and American eagles to proof and mint sets and circulating coinage issued after World War II.
While there is certainly a substantial number of collectors like myself who straddle the classic-modern fence, there does tend to be a discernible divide between those who specialize in one of these two areas.
Long-time specialists in classic American coinage have been known to scoff at the pursuit of modern coins as a waste of time and money. It is not unusual to hear them refer to modern U.S. Mint products as overpriced, overhyped junk. And the views of such people about modern world coins tends to be even more dismissive, especially when the coins use color.
In recent years, several trends have emerged to depress the classic segment of the U.S. coin market with the notable exception of high-end rarities, which seem to always be in strong demand.
First, many of the people who spent years building collections of these coins are older or deceased now, and many newer collectors are more interested in the modern series.
Second, as a result of that demographic shift, and the economic dislocations of recent years that have forced many such collectors to sell their coins for much-needed cash, many of the classic series and key dates within those series have tended to languish in price and interest.
Very high grade pieces tend to be an exception, but overall there are significant bargains to be had today in areas such as low mintage, classic key date coins whose prices have been stable or lower in recent years. There are also a lot of mid-range Morgan dollars that most experts consider undervalued.
Moreover, some series like classic commemorative half dollars from 1892-1954 have seen their values decline significantly, especially compared to their levels during the top of the market in the late 1980′s, or even their prices from several years ago.
Modern coins appeal to an increasing segment of collectors, especially newer collectors, for different reasons.
A lot of new to intermediate coin collectors tend to be rather wary of some of the classic series because their budgets are limited and they may still developing their numismatic expertise. Modern coins seem more accessible to them, and modern series are generally much easier to complete.
To me a large part of the appeal of classic collector coins is that they are just more interesting and more attractive in most cases. They have a richer history and an established track record, which generally means their prices are more stable.
Even with the greying of the community of serious collectors, millions of people pursue the classic series and probably always will. Probably the best example of this is the Morgan dollar.
Modern coins can certainly be a very enjoyable pursuit, but it is easy to get caught up in the frenzy of the latest Mint issues and the chase for the lowest mintage coin or the perfect 70 version of some coin.
There is nothing wrong with any of that, but it really is a to a significant extent a speculative segment of the market. The value of modern commemoratives and other modern issues rises and falls and rises again or falls again with great rapidity. It is very easy as a result to overpay for such coins, and it can take years for many coins to reach their previous highs.
At the same time, if one bought a large collection of older coins at the height of the market, one may never recover a lot of that investment either, but that is a rather extreme case. If you buy classic coins carefully and over an extended period from reputable and knowledgeable dealers, you will do fine.
An interesting aspect of the market frenzy of the late 1980′s is that not all coin values from that period have dropped. Certain coins like common-date silver dollars in high grades, or some higher grade pre-1933 gold coins that carry big premiums over melt value like MS65 $10 Indian pieces, have indeed seen a big drop. But solidly graded, better quality type coins, for example, have in most cases continued to appreciate decade after decade with some exceptions.
In fact, Scott Travers writes in the February issue of Coinage magazine that the recent creation of new coin investment funds could help propel the values for classic collector coins to new heights. He mentions coins like Barber quarters and half dollars in grades MS and PF-64 to 67 and MS and PF-65 Seated Liberty quarters and halves, which he says are undervalued, as being the kind of coins that such funds will want to buy in large quantities, which makes them an excellent choice in today’s market.
Another thing that deters some collectors about older American coins is that it takes a much larger numismatic library and a lot more time and study to pursue such coins. There are all kinds of issues to study from grading to learning about varieties, overdates, striking characteristics, and so forth.
To me, again, that is part of what makes classic coins so appealing. As one collects them, one learns so much about American history, coinage, economics, art, and other fields.
Modern coin collecting is certainly also a very rewarding experience, and not just financially because one manages to obtain the latest, low mintage item and sell it for a nice profit.
In recent years, the U.S. Mint has released a number of particularly interesting coins such as the 2009 Ultra High Relief double eagle, and the reverse proof American silver eagles, and more are in the works like the American palladium eagle. These issues, and their strong secondary market performance, have certainly helped spur greater interest in modern coins.
Modern coins have also become a more complex segment of the market. Apart from issues like errors and varieties, mintage numbers are very important to this area.
Obtaining timely and accurate mintage data can be very frustrating. The U.S. Mint is slow to release the final, adjust mintage levels for coins, and astute collectors are forced to rely on web sites that provide weekly sales levels to get a sense of what the rough mintage levels will be for a certain issue.
Moreover, even the most widely used and revered resources for collectors like the Red Book (the Guide Book of United States Coins) are slow to publish the latest data and often include incorrect information.
This is undoubtedly partly a result of the delays in obtaining data from the U.S. Mint. But I have never understood why there is no one, accurate printed source for this information even a year or more after the coins have been released. Coin book publishers and catalogers may wish to keep this in mind, as I firmly believe there is a need for such a resource.
Whatever you collect, enjoy it, study it, and take your time to purchase coins that you will be proud to own rather than settling for the first one that fills a hole in your album. As the years pass, you will be glad you did so.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.