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
‘Rare’ £1 coin sells for £5,000 on eBay – do you have one at home?
The coin was sold with a "minting error" which made it more valuable to collectors The coin was issued in 1991 and the seller claimed it has a "minting error" which makes it extremely valuable to coll... more info

'Burglar', 32, 'stabbed coin collector to death after stealing rare Beatrix Potter 50p pieces'
A coin collector stabbed a 'kind and helpful' fellow enthusiast to death to get his hands on his rare collection, a court heard. Danny Bostock is accused of attacking Gordon McGhee in his home - stabb... more info

Rare gold coin found in old bureau desk
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US Gold Coins – A (Brief) Analysis of Low-Grade No Motto San Francisco Half Eagles and Eagles
With nearly half the total coins graded in VF35 and below, this is a significant percentage. Two dates really stand out to me based on these numbers. The first is the very rare 1864-S, which has ... more info

Fastest way to earn coins in Anthem
As expected, completing daily trials net you less coin than weekly ones (monthly trials, as of this writing, reward you with rare crafting materials, but not coins). Second, there are separate challen... more info

Rare Roman coin find in south Warwickshire
Roman coins and the pot they were found in. THEY were turbulent times in the Roman Empire and a hoard of 78 coins unearthed during an archaeological dig in south Warwickshire will go on show permanent... more info