Being a rare coin collector is an incredibly broad term. There are different ranges from people who just like to hold onto coins that were minted the year they were born, to seasoned investors that spend millions on rare coins. The average collector falls somewhere in the middle, accruing rare coins for their investment potential, and because they are a fascinating collector’s item. The ideal way to collect coins is to keep them profitable, but some avid coin aficionados will let their emotions cloud their monetary judgment, which is fine for a hobbyist, but from an investing point of view it is not ideal.
If you are interested in accruing and hoarding rare coins for profit, it is very important that you understand some basic principles. The difference between financial gain and loss lies in the approach of the collector/investor. If you want to reap the benefits that rare coins can offer, it is essential that you seek out only the coins that actually have potential to grow. There are plenty of rare coins out there that may seem interesting, but they will not hold their value.
The easiest way to determine if a coin is going to still retain its worth (and hopefully grow over time) is to look as its past performance. Looking at the past to determine what the future holds is a timeless investing strategy in all markets, and the same holds true for investing in rare coins. Although a positive past performance does not necessarily guarantee success in the future, it certainly sheds some light on what you can expect. Obviously if a coin’s value has been steadily declining for the past 30 years, it is probably a good idea to avoid it!
You may be wondering how you are supposed to learn about the past performance of a coin. The easiest and most effective way to get a grasp on the rare coin market, as well as the performance of specific coins, is to talk to people who have been in the industry for years. Find a reputable dealer and give them a call. You will find that the dealers who are trusted within the numismatic community can offer you advice and information based on the years that they have spent dealing with rare coins.
Of course, if you ever feel like you are being pressured, the best course of action is just to politely decline and call up a different dealer. A good dealer should provide you with the straight facts, as well as their personal opinion, and then let you make an informed decision for yourself. Rare coins can be a substantial investment and you deserve to be able to buy with 100% confidence.
The internet is another incredible resource for coin collectors and investors. It is possible to become a knowledgeable rare coin expert without ever spending a cent. This is the best way to approach your rare coin investment: learn about the market and about rare coins in general, and then buy when you are positive that you are ready. The worst thing a potential collector or investor can do is to jump into things too fast. Nobody wants to be stuck with an undersized paperweight after all!
Remember to avoid shady dealers, “bargain” prices, and focus on quality, and you can own a timeless heirloom that will appreciate in value as the years go by. Few other long-term investments offer the promise and potential with negligible risk as rare coins. Whether your rare coin investment pays off in the long run depends largely on your approach. Take the time to buy the book before buying the coin and you should be just fine.