Investing in collectible coins can be a great way to begin storing your wealth in valuables while simultaneously pursuing your passion for rare coins. However, while regular bullion provides you with a store of wealth that fluctuates only with precious metal prices, certain collectible coins have value based on rarity and other characteristics. As such, investors who are interested in becoming collectors of rare coins must do their homework to make sure that their money is being put to good use. If you want to start your own coin collection, here are five tips for investing in collectible coins that will help you get started.
1. Understand the factors that contribute to a coin’s value.
The most important investment you can make while engaging in this new hobby is the investment of time. Make sure that you carefully research the collectible coin industry to better understand which factors contribute to a coin’s value and what you will need to look for when you begin collecting your own coins. For example, some of the areas you will need to evaluate when researching a new coin include:
- The background behind its numismatic value (why do collectors find it valuable? What is the story behind it?)
- The year it was minted
- The place it was minted in
- Its grade (the condition of the coin)
- Its melt value
Of course, it’s important to remember that there is no guarantee that a coin will appreciate in value over time. Do your research and build your collection carefully, investing only in items that you are willing to put your money into.
2. Purchase from reputable companies (or meet in-person with your physical sellers).
Purchasing from just any source online is a coin flip. Rather than hoping for the best and potentially receiving the worst, look for reputable companies who have a reputation for selling high-quality collectible coins to interested buyers. For example, if you have been looking into purchasing the 2020 Silver Eagle Coin, consider reaching out to a company like SD Bullion that can provide you with the security that you are looking for when investing your money into collectible bullion coins. With a comprehensive coin background, shipping insurance, and the lowest online premiums over the silver spot price, this can be a great way to jumpstart your coin collection with ease.
If you do plan on buying coins from other sellers who are not as well-established, it is important that you meet with them in person to fully analyze the coin’s condition and ensure that they are not trying to rip you off. After you have seen the coin physically, reach out for a second opinion so that you can verify the true worth of the coin. When it comes to buying collectibles, there is no such thing as being too careful!
3. Keep a close eye on potential red flags that point to a scam.
As it is with most things of value, there are people out there who are looking to make money off of items that are not as they are advertised. When approaching a potential purchase, look out for red flags such as a dealer who will not let you see the necessary paperwork or coin condition before you buy, documents that appear to be altered and do not contain the proper grading information, cases that appear to have been opened, extremely high prices that do not match the quality or background of the coin, and false claims about buy-back options offered by the seller. If you see any of these issues when engaging with a dealer, walk away and find your collectible coin somewhere else.
4. Invest in the tools needed to keep your coins in mint condition.
Most collectible coins only retain their value if they are in mint condition. If you mishandle your coins and they go from pristine condition to slightly damaged, you can lose you a considerable amount of your initial investment. Make sure that you store your coins in a cool, dry place, keep them in their original cases (or purchase new cases to store them in), and keep any documentation about the coin’s authenticity stored away in a safe place as well. This will help you protect your investments and safely build your coin collection.
5. Diversify your collection of collectible coins
Much like you would diversify your portfolio of stocks, it is important that you diversify your coin collection in order to reduce risk when investing. This means spreading your money across classic coin offerings, rare coins, gold and silver bullion, and other common products that other collectors are pursuing. Not all coins retain their value over time, but if you invest your money in a wide variety of valuable, rare coins, you are sure to build a collection that will perform well should you decide to sell in the future.
Starting a coin collection is something that requires extensive research and a careful eye. If you have a passion for rare, collectible coins and are looking to invest in these products, use the guide above to learn some of the most important tips you will need to successfully start and grow your own coin collection.