Investing in Rare Coins


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SPECIALS

This article briefly summarizes the main advantages of investing in rare coins and offers some guidelines to prospective rare coin investors.

Advantages of Rare Coins as an Investment

The following summarizes some of the main advantages of rare coin investments.

Rare coins have historically protected or preserved wealth as strong inflation fighters, particularly in countries whose paper currency has been severely weakened. Any time our paper money is threatened, rare coins can protect wealth much like an investment in gold bullion.
Rare coins are selling at steep discount to their 1980's highs and, given the cyclical nature of the rare coin market, may be poised for rapid price appreciation in the near future.
The beauty of rare coins can be enjoyed much like any other work of art. They are also a very private form of investment not subject to government scrutiny common to other types of investments held in banks and by brokerage houses.
Rare coins are easy to store and are virtually indestructible. They are also insurable. Rare coins represent truly portable wealth which can be moved from place to place very quickly and easily.
With thousands of coin dealers around, selling most quality rare coins is quite easy making them a fairly liquid investment.

Guidelines for Rare Coin Investors

Here a few basic guidelines that prospective investors in rare coins may benefit from.

Have clear objectives in mind when buying rare coins as an investment. Decide what types of rare coins you should acquire, the total amount you wish to invest in rare coins and the circumstances under which you will consider selling your coins.
Keep in mind that the market for rare coins can be particularly volatile. Further, the difference or "spread" between dealer buy and sell prices is normally much higher than the commissions charged by brokers for equity investments. Consequently, before rare coins can be sold by an investor at a gain, a larger appreciation in the rare coin prices must occur than may be the case for other investments.
Only buy rare coins graded and authenticated by the leading independent grading services whose standards are accepted industry-wide.
Buy coins as a long-term investment only. Do not expect short term profits from rare coin investments. Expect to hold the coins for 10 years or longer.
Only buy rare coins that are popular with collectors and are actively traded. Avoid thinly-traded esoteric coin issues which may be very difficult to sell in the future.
Never buy very expensive rare coins by mail-order or from any dealer on a "sight-unseen." basis. Buy only "sight-seen" Quality Certified Coins. If you buy rare coins from a dealer "sight-unseen" you risk obtaining the least appealing specimen available for a particular grade.