How Do You Invest $10,000?

The current state of the economy makes it a challenge to decide where to invest, but there are opportunities in coins.

My primary business is buying and selling rare coins. I spend most of my day canvassing my client list for new acquisitions. Our daily routine also includes following up on leads that fill my email inbox most days. You can’t sell rare coins unless you can find them. I have always enjoyed the thrill of the chase!

Despite being mainly in the business of filling the needs of our collector base, we often get inquiries about investing. For generations, rare coin dealers have been selling coins and bullion as investments. Many of my fellow coin dealers have the word “investment” in their company names. More recently, selling anything as an investment comes with more legal consequences. Most of the major retail companies in the country avoid the word “investment” when selling coins.

We also generally discourage looking at rare coins as pure investments. My advice to those who ask about investing has always been this: “Collecting rare coins has usually been a good investment for those who take the time to learn about what they are buying. Investing without taking the time to learn about the hobby does not usually work out.” Despite this advice, we still get a lot of questions on how to invest in rare coins and bullion.

Investing in anything is very challenging now. The stock market is near record levels, once again. As anyone who sees the headlines knows, the market is rife with uncertainty. The equity markets will most likely do well in the long run, but the next few years is anyone’s guess.

Keeping your money in cash is a terrible idea, as inflation continues to erode the value of the dollar. The official inflation rate is about 3%, but that does not seem to include most of the things I spend money on. The impact of pending tariffs may also raise the cost of consumer goods. Keeping a stack of cash under the mattress is the surest way to go backwards.

The cost of real estate has skyrocketed in the last five years. This once-solid investment now seems overpriced in many cases. Real estate is usually a local market situation, but from speaking to most of my friends, it is hard to understand the rising costs in most parts of the country. Escalating interest rates only magnify the un-affordability of real estate for most buyers.

For centuries, gold and silver have been considered one of the most reliable hedges against the devaluation of currencies. Gold and silver have been a cornerstone of sound money since ancient times. Despite attempts in recent years to paint gold and silver as relics of the past, they have once again been a flight to safety for investors and nations around the globe.

There has been so much attention to gold in the last year or two, the price now seems frothy, as well. Gold has recently been trading for $3,250 to $3,450 per ounce. This is astounding in terms of historical price levels. Gold prices have risen nearly ten-fold in the last 10 to 20 years.

1895 Liberty Head Double Eagle and an 1880-CC Morgan Dollar. Image: NGC / CoinWeek.

As the title of the article suggests, investing $10,000 today can be very challenging. Your $10,000 would now only buy three one-ounce gold coins. I am still amazed at how much money it takes to buy a small stack of gold coins when they show up in our office. Gold may keep going from here, but for now, you don’t get a lot for your money.

The historical average of the gold to silver ratio has been about 16 to 1 for generations. Today, gold is trading for about 100 times the price of silver per ounce. This is the first time in my career that I can remember this happening. Clearly, either gold is overpriced, or silver is very underpriced.

There are a few factors that partially explain the anomaly of the current imbalance of prices for gold and silver. Gold is being purchased in giant quantities by central banks and global institutions. Gold is considered the classic flight to safety by these buyers who want to diversify away from currencies, particularly the US Dollar. Massive federal deficits seem unfixable, and gold is the one safety net that seems most attractive.

Another consideration is storage. It is much easier to store three one-ounce gold coins than it is to store three 100-ounce silver bars. One million dollars of gold weighs about 19 pounds. One million dollars of silver weighs 1,923 pounds. Clearly, silver is not suitable for most big investors.

Back to the original question: how should you invest $10,000? Based on all of the above, I would recommend US Silver Dollars. Morgan and Peace Silver Dollars are among the most popular coins the United States has ever produced. They were struck from 1878 to 1935 and there are dozens of so-called common date Morgan Dollars that can be purchased for less than $60 in Mint condition. Peace Dollars are an even better deal, with common dates available for about $40 in Mint condition.

The prices for Morgan and Peace Dollars jumped in 2021, when the United States Mint released their tribute commemoratives. The coins were very popular and created an instant rise in demand for the vintage issues. More recently, prices have been flat for most of the common dates for the series and are underpriced, in my opinion. For $10,000, you could buy around 200 Mint condition Morgan and Peace Dollars. Another great option would be to buy as many different date and mintmarks as possible in Choice or Gem condition.

An investment of about $10,000 in common date Morgan and Peace Silver Dollars could also be the gateway to starting a collection of the two series. Your initial investment could help you learn about the series before moving on to the rarer issues. Remember that collecting rare coins is usually a great investment, but you need to educate yourself before jumping in.

There are lots of ways to learn about US Silver Dollars, but finding a mentor with lots of experience would be invaluable. There are also several specialty books with tons of information. The NGC website also has information that will be very valuable as you start your numismatic journey.

You might discover rare coins because you wanted to find an interesting alternative investment. If you also invest some of your time, you may find a hobby that will be profitable and also provide a lifetime of enjoyment.