Why Presidential Dollar Coin Rolls Are Not A Good Investment

"We are opening the vault for a limited time only. Don't miss this golden opportunity."

These were the words that greeted me when I opened the offer that came in the mail today. It was from a well known marketer of collectibles and billed itself as "The smart way to collect Presidential Dollars."

The offer was for rolls of 12 Presidential dollars for "Only $34.95" plus $4.95 for shipping and service. That is more than 200% over face value for coins that are currently in circulation!

The offer asks you to consider "a similar series of U.S. President stamps . . . [that] sell today for 12 times or more than their original face value."

It includes a chart showing what a great investment these Presidential stamps issued in 1938 turned out to be. The chart showed the stamps rising in value by 1,200%!

Ironically, their chart starts with the stamps at face value and doesn't include a 200% premium paid upfront as you would pay with their Presidential coins offer. More importantly, what do these Presidential stamps have to do with the future value of Presidential dollars?

As far as I'm concerned, nothing justifies paying a 200% premium when I can get uncirculated coins for face value.

Even if I don't consider the coins an investment, why not buy my Presidential dollars from the offer I got in the mail?

Here are 3 reasons they list that make the offer seem like a good deal.

"Each Presidential $1 coin is a limited edition!"

Wait, let me pull a coin out of my pocket. . . . It's a 1973 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 about 348 million coins. It may seem like a lot, but it's still a limited edition.

I guess I better stop spending my money. It's all limited editions!

"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 of these unique $1 coins in circulation 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?

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 a slightly worn example is worth about $14 (2007 Redbook prices).

The 1883 with the word "CENTS" has a mintage of over 16 million and a slightly worn example is worth about $100. You would think that the lower mintage coin would have the higher value today, but it doesn't.

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.

Hoarding keeps values low. It does not make them go up.

Simply put, the smart way to collect Presidential dollars is NOT to invest in Presidential dollars. If you really want to put together a set of the coins, go to your bank and ask for some. Although this may take a little time as not all banks will have every President, a few phone calls before to some banks and I'm sure you'll be able to find them.

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.