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
12/06/2019
Sunken treasure: Rare coins recovered from 1857 Gold Rush shipwreck
Nine rare silver quarters recovered from the wreck of a steamship that sank carrying treasure from the California Gold Rush are set for auction. The quarters, minted in San Francisco in 1856, have a ... more info

12/04/2019
Rare coins made in historic N.J. factory could garner more than $500k at auction
A rare coin set minted in a historic Bridgeton factory is set to go on auction Wednesday and net a substantial amount of money. The public auction of the rare coin set will be held by Heritage ... more info

12/03/2019
Video shows man breaking into store stocked with rare coins in Silver Spring
The incident happened Aug. 30 at the Bonanza Coins store, which specializes in selling rare coins, on Wayne Avenue. Montgomery County Police said they put out a surveillance video and photos, ... more info

12/04/2019
Super-rare gold rush coins, minted in SF, found in 1857 shipwreck
Nine rare coins minted in San Francisco are the latest finds from the haul left behind by a shipwreck so massive, its sinking contributed to a U.S. financial panic in the 1800s. The SS Central America ... more info

12/04/2019
Suffolk hoard of Anglo-Saxon coins sells for £90k
A hoard of Anglo-Saxon coins discovered in a field by an amateur detectorist has fetched £90,000 at auction - three times its original estimate. The collection, made up of 99 "silver pennies" thought ... more info

12/07/2019
Will your home insurance protect your rare coin collection?
Here, Which? looks at whether home insurance offers the right protection for rare coin collections and how to find the best policy if you’re a collector. While most home contents insurance policies do ... more info