Are Presidential Dollar Rolls a Good Investment?
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 U.S. Mint Image |
I recently gave the direct ship program a try and ordered a box of dollars. I have opened some of the rolls and the coins are definitely brilliant uncirculated. In fact, the coins are nicer than the individual coins I’ve gotten from the bank.
At the bank, I’ve had to watch as the tellers put their fingers all over individual coins as they were counted and then clanged all the coins as they were handed over to me. I’ve watch the grade of the coins go from uncirculated to circulated during that transaction.
What about the mail offer I received?
Even if I don't consider the coins an investment, why not buy my Presidential dollars from the offer I got in the mail? They list some reasons that make the offer seem like a good deal. Here are some of those reasons.
"Each Presidential $1 coin is a limited edition!"
| Since this article was first published, the U.S. Mint has stopped manufacturing Presidential dollars for circulation and has revised the Direct Ship program to eliminate the free shipping option. |
Wait, let me randomly pull a coin out of my pocket. . . . It's a 1937 Philadelphia quarter dollar. Hmm, is this also a limited edition? Better check my Redbook. . . .
Yep, here it is. The mintage for 1973 is limited to only 347,924,000. Oh my gosh! According to the Redbook, all of the change I have in my pocket consists of limited edition coins. I have to stop spending my money!
"Coin collecting is a rapidly growing hobby in the United States"
I'll give them this one although I'm not sure how many new collectors it will take to justify their 200%+ premium. This argument was used with the state quarters. Did that pay off?
"You may not have even seen any . . . because they're being snatched up and hoarded away as fast as they come out."
This one makes me laugh the most. We don't see them in circulation because nobody wants them. Try spending a few. I've had a cashier tell me how much she hates the coins because the next customer will refuse the coin as change.
If they are being "hoarded away," how will this really reflect on their future value?
The hoarding effect
Let's look at an example of a coin hoarded in the past. The 1883 Liberty Head nickel without the word "CENTS" on the reverse had a mintage of around 5.4 million and is worth $14 in AU-50 (2007 Redbook prices). Yet, the 1883 with the word "CENTS" has a mintage of over 16 million and it is worth $100 in AU-50. You would think that the lower mintage coin would have the higher value today. But once people heard about the design change to add the word cents to the reverse, they assumed the original design would become scarce. So they hoarded them. The result is that more of them survived in relatively good condition.
This hoarding phenomenon recently occurred with the state quarters. (Believe me! I've seen some of the hoarding. Right Mom?) If this is happening with the Presidential dollars, then I think it's safe to say this will negatively impact their future value to collectors.
The smart way to collect
Simply put, the smart way to collect Presidential dollars is NOT to invest in Presidential dollars! Millions of Americans were introduced to coin collecting through the joy and fun of collecting state quarters. Let’s hope that the Presidential dollars have a similar affect on the hobby.