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
Treasure hunters pull rare gold coins from fabled SC shipwreck
The company published photos of a coin on its Facebook page last week, but has said little public about the salvage work. The piece, a $10 gold piece "is pristine Mint State condition, and the finest ... more info

Rare Gold Coins Turning up in Shipwreck of SS North Carolina
Just 20 miles off the coast of Murrells Inlet, South Carolina, a shipwreck dating back to the early 1840s could yield a cache of rare gold coins from the Dahlonega and Charlotte Mints. Divers have ... more info

Israel nabs 69 ancient Greek coins being smuggled from Gaza to Israel
Sixty nine ancient and rare coins from the period of Alexander the Great were caught being smuggled from the Gaza Strip through the Keren Shalom crossing into Israel, the Defense Ministry said Tuesday ... more info

50p turns 50: The 2009 Kew Gardens and the other rare Royal Mint coins worth a pretty penny
The rarest 50p coins in circulation have been revealed as the Royal Mint marks half a century since the piece was introduced. The 50p coin, which entered circulation on October 14, 1969, is considered ... more info

Rare 50p coins featuring panto characters to enter circulation - worth £200 each
Pantomime characters Aladdin, Cinderella, Snow White, Jack and the Beanstalk and Dick Whittington will appear on the new coins this Christmas ... more info

19th-century shipwreck is suddenly turning up gold coins off South Carolina coast
Blue Water Ventures International Photo A 180-year-old shipwreck popular with scuba divers is proving to be a trove of rare coins and artifacts for a salvage project launched 20 miles off the South ... more info