Show Me the Money! A Closer Look at Investing in Coins

As an investment , having collectibles can help diversify your portfolio while reducing risk. Do you know the general rule of thumb? When it comes to collecting collectibles such as coins, invest in what you are passionate about. Even if your collection does not realize a return on its investment, you can still enjoy the items you have accumulated.

Are you an investor?

Investing in tangible assets is a great way to reap the benefits

For those who are tired of fluctuating stock markets and have lost faith in them, collectibles are quickly becoming a popular choice for an investment vehicle. Tangible Assets are an investment that can increase in value over time. This appeals to investors. These assets are not only for the super-wealthy. Personal interest in tangible assets is still the main reason why people invest in their collections. Although rare coins can be considered a commodity-like investment, they are still valuable for their sentimental value. However, coins can also provide attractive financial returns.

Expert Mark Ferguson told Coin Week that type coin collecting has grown in popularity as gold coin prices have increased over the generations. This is especially true when prices for rare and scarce dates within a series have so high."

Uncertainty is a constant in both the private and public markets. These uncertainties, along with economic downturns and recessions, require creative investment strategies. Investors who are looking to invest in tangible assets (also known as hard assets) have many options. These include income-producing assets like timberland, farms, and commodities of any kind.

Note: Coins as bullion are different from coins as numismatics. Bullion has a higher "melt value", which is the amount of the metal if it were to be melted down. Because they are more common and often made from different metals and components than other coins, numismatic coins have a lower melting value. They are worth less in melted form than they are when they are in coins. It is best to "buy bullion as a business tool, and numismatics as a hobby."

Why is Rare Coin Investing Still Popular?

Ilya Zlobin is an expert in ancient numismatic coins, a dealer and enthusiast at TrustedCoins.com. Zlobin says that rare coins, particularly those of the ancient Greeks or Romans, capture the feel of the period and the art of the time [like] statues, architecture, and architecture that have been long lost to history." Investors can also resell the coins at a high profit if they make the right purchase for the right price.

In the past, collecting coins was called The Hobby Of Kings. This is due to the rise in numismatic scholarship and education over the last 500 year. For most people, having coins makes it easy to have a piece of history. Coins are generally more accessible than larger tangible assets investments for those who have a particular interest in antiquities.

For beginners, collecting coins

For beginners, collecting rare coins may seem daunting. This advice is from experts and experienced collectors:

  • Select - Pick a specific emperor, denomination or theme to guide your investments. Focus on one area and work within it. A small collection is valuable but it's not likely to be worth much if you have too many.

  • Don't randomly choose from your options. Make sure you know what you are looking for, and make sure you examine coins carefully so you can ensure they match the direction in which you intend to take your collection.

  • Study Collectors should not rely on the advice or opinions of sellers. Collectors need to become experts in the field, learning about values, rarities, and denominations. Talk to other collectors, read trade magazines and find out what questions to ask.

  • Start Small- By buying small, investors can start collecting without having to bet the farm. Experience is the best way to buy large quantities of coins and high-priced coins. It is best to buy rare coins and coins with historical significance. Amateur or inexperienced collectors shouldn't spend large sums of money on coins that they don't know. Susan Headley, a numismatics mentor and collector, notes that "if you don't have the money to spend $2,000 per coin to buy... high grades," then you should buy common coins in as good grades as you can.

Is Your Rare Coin Graded?

All coin investors need to be familiar with their dealers. Rare coins are an investment just like any other asset class. Trust is the key. Zlobin, a rare coin dealer, notes that the grading system is subjective.

  • Good (G).

  • Very Good (VG),

  • Fine (F),

  • Very Fine (VF),

  • Additional Fine (EF) and finally

  • Fleur-De-Coin (FDC), or a perfect mint state.

It is subjective to judge the overall appearance and appeal of a coin. There may be different standards for grading. Some houses, such as Heritage Auctions, offer some guidance. The Professional Coin Grading Service can also be a source of information. It is important to remember that fine distinctions can make a huge difference in the value of coins, even thousands of dollars worth. Rare coin investing is subject to subjectivity.

"The coin's aesthetic beauty and preservation are important to many collectors and dealers." Zlobin says that a beautiful coin is desirable and more rare in its state of preservation. Zlobin says that there are many other important aspects for antique numismatic coins such as the centering, artistic beauty, and sharpness. Coins from ancient times were made by hand. A coin with great preservation, which is well centered and has interesting historical characteristics, such as a period or city, would be of higher value.

Are Coin Investing Risky?

"Caveat emptor" says Zlobin. "Deal only with people who can guarantee your coins and have a track record of success with them [and] with people whom you trust." Always negotiate for the best price.

Every investment comes with inherent risks, and coin collecting is no exception. Do the risks of investing in coin collecting outweigh those elsewhere? Collectors say that the risks are not greater if you choose to invest in something you love. Zlobin says that there are many trustworthy dealers. "It's a huge advantage to deal directly with them as they have the knowledge and experience to ensure you only sell authentic coins.

The Federal Trade Commission has warned consumers to be aware of fraud. Investors can lose money by making false claims about the grading, current values and buy-back options.

"Examine coins in-person. The FTC advises that it is difficult to make a decision about whether or not you want to buy a particular coin on the basis of a photograph or a conversation. You can search online for coin dealers. Learn from others' experiences. If possible, try to communicate offline to clarify any details. You can also contact your state attorney general and local consumer protection agency to clarify any details.

Zlobin's risk advice for investors is:

  • Always strive to obtain the highest possible price. Rare coins don't necessarily have to cost a lot of money. Dealers can offer you discounts, as margins are often sufficient to make everyone happy.

  • Don't worry about the outcome. While you will do your best to get a great deal, be a collector as well as an investor. You will win regardless of the outcome.

  • Keep track of the amount you paid for a particular coin, as well as all receipts. This will allow you to keep track of the grade and purchase information for each coin. You will also need to organize your investments if you plan to sell them and make a profit.

  • Dealers who are willing to prove their authenticity. Some dealers offer a lifetime guarantee for authenticity while others will issue certificates.

Return on Investment

Rare coins will generally have a similar investment horizon to other investments, one that can last from a few months to many decades.

Zlobin says that he has seen ancient coins being sold at an auction house only to have them be sold again a few months later at another house. Zlobin says that it is possible to make a lot of money quickly if you have a good understanding of the market. However, the actual money is earned when the item is purchased. It is a good idea to do your research so that you know you can get the exact amount you paid for the item back. It is a smart idea to hedge your net wealth with uncertain valuations of global currencies. This is also a great way to store wealth. Because they are less susceptible to market fluctuations, numismatic coins may have a higher resale price than silver or gold bullion.

Professional numismatic reference websites allow investors to track the price trends of coins over many years. They can also get an idea of the future performance of certain coins on the resale marketplace. While any investment comes with risk and almost all dealers will tell you that past performance is not an indicator for future results, investors can still make informed decisions about their coins if they look at the history of professionals.

Many others are investing in rare coins, should you?

Rare coins are a popular investment option due to their economic influence and the rise in the Numismatic Stock Index. Richard Giedroyc informs Numismatic News that the spot gold price has increased by more than 17% this year. The July silver prices rose six percent. These factors have prompted buyers to look for physical metals, including bullion and bullion-impacted coins. "Coin collecting is on the rise."

Who buys rare coins? It's generally anyone who is interested in owning a piece of history. Zlobin states that the historical value of ancient numismatic coins is crucial. "A Julius Caesar coin, for example, sells on any market in almost any condition. Alexander the Great is another well-known name.

A great investment is coin collecting. Coins are an investment that can provide diversification and protection against inflation for serious investors. Zlobin says that many people don't realize this but ancient coins actually are quite plentiful.

Numerous famous people are or were avid coin collectors. These include J.P. Morgan, The Hunt brothers, Wayne Gretzky (aka "Jed Clampett") and Penny Marshall, as well as J.P. Morgan. As a way to diversify their investment portfolio, it's not unusual for celebrities to collect tangible assets such as rare coins and fine art.

Zlobin says that coins, particularly numismatic, are a wonderful asset to possess. Think about how difficult it would be for you to carry a large painting, a statue, or other heavy works of art around in your pocket. But an old coin can fit in your pocket and still be very valuable. You can conclude that coins are the original money form and will always have value, either intrinsically or numismatically.

Collectors can make a lot of money by investing in bullion and numismatic coins. However, rare and numismatic coins are not widely available. Therefore, it is important to collect for enjoyment before you consider making an investment. You may have a rare or valuable coin in your collection.