The article is broken up into separate posts - The coin investments list is at the end of the articleI agree with tamo42 that the market seems to be stabilizing, and that usually means we've reached the bottom. Normally we would expect to be well into the busy season right now, but I predicted it would be muted, and indeed it is. Some of the best coins are still setting records though, and a few less expensive coins are also. Those are good signs that the market is still kicking.
I've been buying with less aggression than usual lately, but my purchasing intensity is increasing. Good coins are getting harder to find, and that's causing buyers holding out for bargains to find less and less available as time goes by. We'll see how things pick up later.
My overall feeling is that hard times might hold back the cheaper, higher mintage coins because it may be difficult to rally enough buyers with spare cash to keep the supply off the market. However, looming inflation is likely to pull out massive amounts of cash from wealthier buyers who will need expensive coins to absorb their wealth. The effect of this will be that the best coins might increase 10% in a month, while everything else increases 2%, as a random example. It will really pay off to get the best coins.
Watch out for bullion action that might overshadow coins, and draw away buyer attention. Last time silver gained 20% in a month, it was hard to persuade newcomers to look at the numismatic coins, even though during the same time period some coins may have gained 200%. What really gets bullion people's attention is when bullion prices drop or go flat, but coin prices continue rising. That's what gains the market new converts, both as hobbyist collectors, and investors.
Bullion "stacking" can be very satisfying in a quantity-over-quality sort of way, with the impressive size and weight of a pile of glittering gold or silver bars clanking together with a ringing "ping". But, thats commodity stuff, prone to manipulation, regulation, thievery, etc. Coins are harder to categorize and define, but also more profitable than commodity bullion. Some people try to mix the two with "premium" bullion that costs more than generic bullion - that is a mistake. If you choose to diversify into both coins and bullion, don't try to blend them, or you'll lose profits when gains bullion value outstrip numismatic gains, or vice versa.
As a general rule, you will be best off buying the cheapest bullion available, and/or the most expensive coins available. Both are more liquid and more profitable than anything in-between.
If you're new to investing in modern Chinese coins, you have a lot to learn, so where should you start? The pandas are the obvious place where most people begin their education in Chinese coins. They're popular, and great investments. But, going forward, I think they'll be taking a back seat to lunars for a while. Overall, pandas are THE Chinese coin series, but temporarily (most of 2012?), I think bigger profits are going to be made in lunars.
If pandas are China's equivalent of the American Eagle coinage, then lunars are China's Buffaloes. Except, the lunars are far more important to China's portfolio of coins than America's Buffaloes are. Lunars were made BEFORE the pandas, beginning in 1981. The lunars were intended to be collector coins from the beginning, and they all had very small mintages. The pandas were originally intended to be inexpensive bullion, and only later had face values, boxes, and COA's added.
For the next year or so, if you're just getting started in investing in modern Chinese coins, I recommend that you make the pandas your second priority, and the lunars your first. They're simpler to learn than the pandas, since there are few, if any, recognized varieties of lunars. They were minted in much smaller quantities, and far fewer survived in high grades, especially in the early silver coins, which is the recipe for a good investment.
Plus, there's much more information about lunars available now than ever before - they're even included in Peter Anthony's PricePedia now, which originally was dedicated solely to pandas. The lunar market is ready to pop because all the important factors are in place. We have quality references available about them, we have a 2012 year of the dragon coming up, and plenty of wealthy newcomers to the market that collectively will push prices to the stratospheric levels that some of the pandas have reached.
But, since the big move hasn't been made yet, you still have your opportunity to get in on the party!
My choicesFocus your purchases on rarity together with popularity during this weak market. Sprinkle in some underpriced coins to ensure you don't miss out on big percentage gains in the cheaper coins. Stick with the best coins available, in the most popular types (prefer 1 oz over 5 oz, for example). Be sure to continually upgrade your coins so you can keep up with the market as better coins accelerate ahead of lesser coins.
* Coins in a 70 grade.
* Lunars, starting with dragons, and expanding to the whole sets. 2012 year of the dragon will be lunar-mania.
* 1983 15 g silver pig (key)
* 1981 15 g silver rooster
* 1982 15 g silver dog
* 1984 15 g silver rat
* Dragon and phoenix (marriage theme symbolism).
* Peacocks (marriage theme symbolism).
* Pandas, especially silver, the rarer the better.
* Normal sized expo pandas, especially gold accented silver ones, and silver Munich expo medals.
* 1979 year of the child, and possibly other child-themed coins like the 1989 children's fund panda .
* Other 1979 dated early coins and medals.
* Almost all medals are underpriced - buy the rarest, most popular ones first.
* 1990 goldfish medals.
* Gods medals (longevity, war & wealth, mazu, buddhas, etc).
* Underpriced invention & discovery, especially silver.
Remember, there are several kinds of rarity, in order of importance:
* Mintage rarity
* Grade rarity
* Relative rarity within a series ("key" coins)
* Variety rarity/popularity (you have to have popularity too)
