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.

Go to Next Chapter "What is a "Rare Coin"?"


Rare Coins News
eBay: Rare 50p coin selling for £80 – and this is the UK spot to find one
Rare coins sell on eBay for many times their net worth, thanks to their value to collectors. A rare 2018 5p coin was listed by user akhatreej, and sold for a winning bid of £77 – plus £2.90 for postage. There were 19 bids for the rare 50p coin, which ... more info

Rare US coins sell for pretty penny at auction in Florida
TAMPA, Fla. (AP) — When is a penny worth $300,000? When it's one of the first copper coins struck at the U.S. Mint in Philadelphia, in 1793. The annual Florida United Numismatists (FUN) convention was held in Tampa this week. It's considered one of the ... more info

PNG Report: Rare coins perform well in 2017
TEMECULA, Calif. — U.S. rare coins selling for $50,000 or more and those selling for $500 or less generally did well during 2017, according to the Professional Numismatists Guild (www.PNGdealers.org), a nonprofit organization composed of many of the top ... more info

Smash a penny, pick it up: Elongated coin machines make memories
Nina MacDonald, 64, of south St. Louis, is missing two of the World’s Fair coins: a Masonic one that she gave to her brother because he’s a Mason (she might get it back one day, she jokes) and a rare coin depicting a fish from the Pike. It’s rare ... more info

Rare U.S. coins sell for pretty penny at auction
TAMPA, Fla. — When is a penny worth $300,000? When it’s one of the first copper coins struck at the U.S. Mint in Philadelphia, in 1793. The annual Florida United Numismatists convention was held in Tampa this week. It’s considered one of the five ... more info

Gold trophy pattern coin leads FUN auctions in Tampa
As of Jan. 9, Heritage’s Jan. 3 to 8 U.S. coin auctions held at the 2018 FUN show totaled about $41 million. The offering of any example of this rare pattern, of which Heritage traces 18 known examples, is a significant event and the one offered in ... more info