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
Safe with $30,000 worth of rare coins inside stolen in Calgary break-in
Police are investigating a break-in at a southwest Calgary home last month where someone made off with a safe containing an estimated $30,000 worth of rare coins. Sometime between 8 p.m. on Feb ... more info

This rare Olympic 50p coin is worth hundreds on eBay thanks to one tiny detail
A rare 50p coin can make a coin collector a decent sum of money, if they manage to spot one. Sometimes they pop up in your change, other times they are sold in special collectors edition. Either way, ... more info

Bones were found in the fireplace. Rare coins may have been the motive for murder, police say
It was reportedly not a happy home. The couple lived on a tree-shaded street in Silver Spring Township, Pennsylvania. The house overlooked a creek that corkscrewed all the way to the Susquehanna River ... more info

Extensive Bust Half Collection Offered by David Lawrence Rare Coins
Our Sunday Internet Auction #1058 includes a selection of 542 New Items along with 100 No Reserve Lots and 95 Vault Value Items. The Bayside Bust Half Collection features a large offering of over ... more info

Auction house swamped with people who believe they have a rare 20p coin
An auction house has received thousands of phone calls and emails from around the world as a result of plans to sell a rare twenty pence piece which is now worth thousands of euro. Whyte’s Auctioneers ... more info

'Rare' 14th Century coin found in secret drawer sells for £850
A "rare" 650-year-old coin found in a secret drawer in a desk has been sold for £850 at auction. The 14th Century coin was discovered inside one of three hidden drawers in a 1970s bureau, left to a ... more info