Straight Talk on State Quarters 

I lost a sale this past week..  The reason why is something that you and every other coin ‘investor” needs to know now. 

The sale I lost was to a customer looking for one of the “rare” state quarters.  He said that he was willing to pay just about anything for it.  I had the coin and I refused to sell it to him.  I did, however, exchange this “rare” state quarter for a plain old quarter. I made nothing, but felt quite good about the transaction. 

People come to me all the time, asking if they can buy “rare” state quarters from my shop.  Some of these folks will pay just about anything for “gem” copies. 

If you have not had someone set it straight for you so far, let me do it now – state quarters are not, and never will be a good investment.  After the US Mint PR dies down, these “gem” quarters will be worth 25 cents.  In 50 years, they will be worth 25 cents.  

Why?

• Mintages of the state quarters are in the hundreds of millions for each state.  Therefore, they are not now, and never will be, rare
• Minting technology has improved greatly over the years, so most of the coin pouring into circulation are of a very high grade
• Millions of people are hoarding them

If you have them, sell them now while you still can make a few bucks doing it.

By reading this, you might get the idea that I don’t like the State Quarter Program.  Wrong.  I love it!  I think that it is bringing the joy of collecting back into the hands (and pockets) of the average collector.  Way before grading services began sealing our best coins in plastic coffins, collecting was done largely from the change collected in everyday life.  The State Quarter Program has brought that pleasure back to any collector that breaks a dollar.  If you collect these pieces, you are entitled to be as proud of your accomplishment as if you had lined up enough slabs to reach from one end of your home to the other. Just don’t think of them as a good investment.  If you do you will be bitterly disappointed.

While I have you attention, please allow me to shatter another myth in the coin industry: that buying every coin the US Mint puts out in Uncirculated or Proof condition will make you money.  On the contrary, it is a good way to go broke. 

Let’s take the 2003 United States Mint Uncirculated Coin Set for example.  For $5.84 in coins, you have to pay $18.95 (including $3.95 for shipping). They come in a cellophane wrapper with a certificate of authenticity (like anyone would believe that you would be forging these coins).  It is very unlikely that these coins will dramatically appreciate in value.  Why? Because there are millions of sets sold just like yours. 

One notable exception is coins that contain pure silver or gold.  These too sell at a ridiculously high premium when purchased from the mint, but these coins at least have the potential for appreciation should the value of gold, silver or platinum rise.  If you are betting on one of the metals and want to add the additional investment potential of owning coins, it is better to purchase them from a reputable dealer (there are several to choose from in the Atlanta area).  They will very likely be cheaper than buying from the mint and you will have a larger selection of coins to choose from.   

If you are considering coins as a serious investment, you should consider buying ones that are genuinely scarce, where the quantities minted are known.  These coins can be  very expensive, but their high prices are justified by their condition and scarcity. Your dealer can work with your accountant or investment advisor to help you add these investment-grade items to your portfolio. 

In the meantime, enjoy the State Quarter Program!  If you need one and I have it, come on in and get one for 25 cents.