A Companion to Rare Coin Collecting - Are Rare Coins For You?

Rare Coin

Are Rare Coins For You?

As with other investments, there are many anecdotes about individuals earning enormous wealth from collecting coins. Yet, even the more believable stories are about people who spent twenty years or more patiently learning and developing their numismatic skills. Unlike stocks or real estate, collecting rare coins requires a deeper commitment to learning and dilligence to augment personal knowledge. For successful collectors, there is an emotional attachment to the art not found in traditional avenues for personal finance. In short, as a serious long-term investment strategy, collecting coins is not ideal for everyone.
There are three important prerequisites one should consider before engaging any investment strategy. The first is: Do I have long-term funds that can be committed for a number of years? The second: Do I have the ability to meet ordinary living expenses with other resources. The third: Am I confident of my knowledge of my target investment?
Having the long-term funds to commit to your investment is particularly important when you consider the nature of rare coins. As with other investments, rare coins require a minimum period of "holding" and, to reap the best investment earnings, timing is essential. Rare coins have demonstrated a pattern of growth spanning many years and, for those "hold" their investments over extended periods, profits are the rule rather than the exception. However, for those expect an immediate profit, the results are often disappointing. Keep in mind that some coins might suffer from overexposure and investors who purchase at the peak of a particular cycle may experience substantial losses if they sell into a softer market.
Meeting your ordinary living expenses is paramount over any investment activity. Never expose yourself to possible losses that could jeopardize your standard of living. Since rare coin investing is a non-income producing asset, it should never be viewed as a "savings account" to dip into as the need arises. While certainly capable of providing strong capital gains, rare coins serve mainly as an excellent vehicle for capital preservation, as well as a hedge against inflation and other forces which erode the value of more traditional paper assets.
Knowledge can mean everything. At least where investing is concerned, knowledge can be your best asset. Being able to "see" a good deal is probably just as important as "smelling" a bad one. Unfortunately, there are always those individual who are eager to feed on the naive and gullible. Nearly all of the horror stories surrounding bad rare coin investments concern people who knew absolutely nothing about what they were buying. Save yourself the grief and learn the basics before you buy.
This text discusses some of the many books, magazines and newsletters that are available on the subject. Reading them will help sharpen your ability to "see" and "smell" the opportunities you may find.


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Rare Coins News
10/23/2017
Two pound coin worth £100,000 on eBay: Do you have one of these rare £2 coins?
A £2 coin, which is rare due to errors in the design, is for sale on eBay for £100,000. The coin, known as the abolition of the slave trade £2 coin, was issued by the Royal Mint in 2007. It was created to celebrate the 200th anniversary of the abolition ... more info

10/19/2017
She Found Rare Coins Worth $40 Million—Then the Government Took Them
Although 445,500 double eagles were minted in 1933, each one valued at $20, they were never issued (unlike these rare dimes worth nearly $2 million). Instead, 500 coins were held by the U.S. Mint’s cashier, and the rest were sealed away in the agency’s ... more info

10/23/2017
Coin dealer who stole identities, evaded $400K in taxes sentenced to prison
A federal judge sitting in Trenton handed down the sentence on Friday. Dominick, who ran Westwood Rare Coin out of his home, tried to corner the market by buying coins in bulk from the U.S. Mint with credit cards he opened by stealing people's identities. more info

10/19/2017
Generous Sun Reader donates 27 rare coins worth £300 to our appeal
His collection includes the 24 that were in circulation here plus others from Gibraltar, Jersey and the Falklands. When The Sun’s Mr Money Dan Jones listed the 24 round pounds in April, Warren, a retired railway worker, set about collecting them all. more info

10/19/2017
The Gold and Silver Mine: Tomorrow's rare coins today
One of the magazines I subscribe to has the United States Mint report that lists the mintage figures of all coins struck so far this year. I like to peruse this report to see if any coins, due to the low mintage figures, represent a potentially good ... more info

10/20/2017
Fats Domino's drummer accused of stealing and pawning music legend's rare coins, passport
Fats Domino's former drummer stole hundreds of rare coins and a passport from the 89-year-old musical legend's home in Harvey and pawned them before he was arrested in Massachusetts earlier this month, authorities said. Ernest "Box" Fontenot, 65, is ... more info