Collect First, Invest Second
Ask any big time coin dealer and he’ll tell you quite a few of his clients view collectible coins mainly as investments. Buyers with this attitude are denying themselves some of the greatest profits in coin collecting, while ironically undermining their primary objective of increased financial returns. Let’s take a closer look how this happens.
Serious collectors get to know more about coin grading and better positioned to avoid getting stuck with overgraded coins, the real bugaboo of coin collecting. Many “investment portfolios” have gone up in flames because unscrupulous sellers took advantage of willing buyers with lots of money to spend but little numismatic knowledge. Smart investors learn something about grading before swimming into unfamiliar waters. Not everyone can be a coin grading expert, but a little involvement as a hobbyist helps to sort out the trustworthy companies with the best reputations.
An experienced collector with an eye toward solid future price increases know how to choose between a key date Morgan Dollar in F-12 condition graded by PCGS and an equally priced generic Morgan in MS-65, as labeled by lesser known grading service. The collector knows the key date was most likely properly graded by PCGS and has a long record of strong price advances because of consistent numismatic demand, while the generic option has a too real of a chance of being an overpriced dud. Uninformed investors get hoodwinked everyday by slick promoters into making the wrong choice.
Why Collect Gold Coins?
What are some of the fun aspects of the coin collecting? There are many. By definition, *collecting* implies that coins are being assembled in a non-random manner with a basic purpose or goal in mind, as opposed to simply accumulating coins. The pursuit of this objective offers a form of relaxation and enjoyment to ease the tensions and pressures of everyday life. Hopefully, that’s what any hobby will do for its participants.
Many collectors get a kick out of owning pieces of Americana from long ago. Knowing that the 1863 Indian Head Cent in your collection actually could have been in Abraham Lincoln’s pocket as he delivered the Gettysburg Address is an exciting though, or perhaps the 1917 nickel resting in your Buffalo Nickel album was once donated by a New York school childe to help our doughboys fighting over there in Europe during World War I. Unlikely, but indeed possible.
If you let your imagination run wild the possibilities are endless. Legendary figures come alive or nostalgic eras can be revisited. Visualize being towed in a boat by horses along the old Erie Canal, for maybe your 1824 quarter was once upon a time used to pay the toll. It could be that an 1814 dime in your possession was spent by a drunken sailor in Baltimore for a mug of rum the night Francis Scott Key wrote “Oh, say can you see…” In a sense, coins are visitors from the past. If only they could relive their travels with us!
Other collectors are drawn because of the intellectual aspect coins offer. How were coins minted in the 1790’s? What are varieties and why are some of them so rare and valuable? What is meant by a “good strike” and how does it influence demand and price? Why were some denominations accepted by the public while others rejected? There are countless coin related topics to research and study with many fine references available in book form and online.
There are several things you can do to increase your activity as a collector. Join a local coin club if you have the opportunity. You’ll meet people who have similar interests and develop new friendships. Attend coin shows and conventions. There you’ll see a wide display of coins and have a chance to talk with dealers and other collectors one-on-one. It’s easy to get information on coin clubs and upcoming shows on the Internet.
Educate Yourself
Start up a personal numismatic library, purchasing books to educate yourself about the workings of the hobby and coins that have special interest to you. A good way to save money is order (barely) used books online at a fraction of their new price. Subscribe to at least one of the hobby’s periodical publications. You’ll soak in a lot of valuable information by indulging in them regularly. Coin World and Numismatic News are two of the leading weekly publications.
An international coin club you shouldn’t bypass is the American Numismatic Association (www.money.org). The ANA was founded in 1891 and today has about 30,000 members. One of the finest privileges of an ANA membership is access to the world’s largest numismatic library. Another important benefit members receive is the monthly edition of The Numismatist, the official publication of the ANA, containing information of interest to coin collectors of all sorts. Their articles are quite scholarly and in-depth. Many articles have been archived online for members’ use.
It’s easy and fun to be both a collector and investor. Actually, many of the most successful investors are collectors too. Learn about the coins you’ve already bought or plan to buy. Get acquainted with the facts and histories associated with your coins. Not only can you build an investment program of extraordinary potential, you can also put together a true numismatic treasure filled with enjoyment and pride.
As in investor of coins, you owe it to yourself to at least try to get involved with the hobby for the sake of having fun, if you’re not doing so already. Not only will you improve your status as an investor, you’ll experience certain other benefits that don’t register on the bottom line of you balance sheet. Enjoy coins and take part in the world’s greatest hobby!
