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     Page 2 - Continuation of "Investing in Coins – The 3rd Year secret!"
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More about

The Coin Buyer’s Secret 

 

Perhaps, load up on coins and sets during the third year of issue seems a little dramatic.  Maybe it is.  But . . . first, read the facts below and then you decide.  

The third year of a coin or set series is often (but not always) a lower mintage than the first or second year.  

By now you are probably wondering

“If the coin buyer’s secret is to buy coins during the Third Year of issue, then where’s the evidence that this works?”

We’ll answer that question in a moment.  But first let’s look at the primary factor influencing this phenomena.  Then we will apply that to the new issue coin market. 

Is it supply, or demand, that influences coin prices?

The “demand” side of the supply and demand equation can influence any market, and make a market for things where one never existed before.

Human psychology plays a major role when it comes to demand for anything.  Now here is an important point:

"Usually, by the third year of a coin series the newness has worn off."

  Three years into a series of coins, the series just doesn’t seem new, or as exciting.  Often, coin investors sunk money into the first or second year of a coin series and saw little (if any profit).  They rationalize that there is no hurry to purchase coins in that series, because they are not going up in value. 

 Little do they know that these same coin investors are affecting the third year coin mintagesupply by not buying new issue coins from the mint.  The US mint often produces coins based on the buyer’s orders.  When demand from coin collectors and coin investors is low, it directly influences the resulting supply that is minted.  When buyers decide not to buy, the supply side of the (supply and demand) equation is affected. 

 So, here you have it.  When it comes to new issues made by the US mint, buyers that don’t buy, cause the supply and demand to decrease (at least temporarily).

The proof is in the . . . . 3rd year of coin issue

Let’s examine the evidence by looking at some modern US coin series.  We’ll compare current prices for the first three years of issue.  (We’ll look at coins and sets that the mint sold to collectors, not the general coins issued for circulation.)

Here’s what we find about the third year issue (in comparison to the first two years of issue):

 Eisenhower Dollars (Uncirculated and Silver Proofs)

First year of Ike dollars issued: 1971

What is the most expensive year?  Answer:  the third year, 1973

 

Susan B Anthony dollars (Mint set coins)

First year of issue: 1979

1981 proofs are not much different in price.  However, the third year (1981) SBA P and D uncirculated mint coins are much higher than the first two years of issue.

 Sacagawea Dollars (Proofs)

First year of issue:  2000

Years 2001 and 2002 are higher than the first year of issue.  The 2001 (second year) is the highest.  This is likely because Proof Sacagawea dollars were not issued by themselves, but were only available in sets along with the other denomination coins.  2001 happened to be the third year of the 50 States Statehood Quarter Series.  Consequently the proof set for 2001 (that contained the Sacagawea dollar) was one of the lowest mintage proof sets containing the statehood quarters.

 American Silver Eagle Proof Dollars

First year of issue:  1986

 

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Third year of issue 1988 is higher than the first two years.  At one time it was over twice the price of the first year coin.  Additional low mintage coins were also issued in some later years. 

Gold American Eagle (Uncirculated) Bullion coins

Coins that sell close to the bullion price don’t seem to abide by this 3rd year rule very often.  Perhaps that is because bullion coin demand is often influenced by what the gold or silver market is doing, instead of from collectors who become interested or disinterested in a coin series. 

However, there is one year that’s noticeable in this series. 

 

Uncirculated TENTH ounce gold eagle bullion coins were first introduced in 1986.  Currently the third year (1988 Tenth ounce $5 gold eagle coin) is the lowest mintage and highest price in that series.

 

Silver Proof Sets (with Statehood Quarters in them)

Clad Proof Sets (with Statehood Quarters in them) and

Statehood Quarters (5 coin) Proof Sets

The 50 State Quarter Series began in 1999 and continued for ten years through the year 2008.  Mint sets and several different types of proof coin sets were minted. 

1999, the first year of issue, has turned out to be the most expensive of these proof sets, with the third year of issue (2001) being the second highest price!   

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Normally, large mintages are made during the first year of issue.  However, during 1999 collectors faced two factors:  sticker shock as the mint raised prices on their sets, and an early cut-off of sales by the US mint, thereby leaving some coin collectors without 1999 sets that they were intending to buy.  Coin investors who purchased the third year 2001 proof coin sets also generally did very well for themselves. 

 Conclusion – low mintage often means higher profits

What does all this mean?   The third year of a coin’s series is often lower mintage because demand has decreased for that type of coin series. 

Note that some later years might turn out to be valuable because of low mintages.  However, predicting which years will be a low mintage is hard to do until the mint stops selling them, and then it is often too late to purchase coins at a low price. 

 Another factor that seems to effect coin mintages is that sometimes coins and sets sold during years of economic recession (or depression) end up being low mintages.  (But that’s thought for another article.)

 What to do next?

Here’s a question for you to think about.  The presidential dollar series began in 2007.  The year 2009 will be the third year of issue for the Presidential dollars and the Presidential proof sets. 

 What do you think the likely hood is for 2009 presidential dollar coins to be minted in smaller quantities than the 2007 or 2008 presidential dollars?

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Do you have other evidence of “third year coin investing” that you would like to share with our readers.  Please Email us at
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Above article written by John Lynn - Copyright (c) 2007 - John Lynn   All rights reserved.

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