Coin collecting a good investment?
Daily Southtown - April 23, 2007
A retired federal government agent
recently asked me what my feelings were concerning
coin collecting relative to the investment world.
After a stimulating conversation, I decided to write
about that very subject.
Coin collecting can start out as a
hobby and grow into a serious investment opportunity.
According to Wikipedia.com, the free encyclopedia,
modern coin collecting is believed to have begun in
the 14th century. Today, there are many different
ways to start a collection. You may collect sets of
coins, specific years, mint marks or even error coins.
You may recall a few weeks ago when a mistake in minting
the new dollar coin was discovered, which sent the
value for those coins well past 200 dollars for a
single coin. If you were lucky enough to have had
one of those coins, you could have had an instant
Coin collecting in the investment world
is similar to the way the stock market goes up and
down. A coin that is not worth much today may increase
in value and vice versa. The coins that typically
bring the most value are numismatics, which according
to Webster's dictionary, is the science of coins and
metals. A numismatist may or may not be a coin collector
and a coin collector may or may not be a numismatist.
By using this science, a number is given by recognized
rating services to a coin, and placed in an encapsulated
case to preserve it. A higher number tells you that
the coin is cleaner and less circulated. This numbering
system makes buying and selling easier.
The fact that a coin is
old does not necessarily mean that it is valuable. It may
be that in a given year only a certain number of coins still
exist and this fact may cause those coins to be rare, thus
worth more money. Old coins that are damaged with holes, dents
or that have been repaired may lose their value.
The material that was used to mint the coin can be a factor
in determining the value. Just take a look what has happened
to the price of gold in the last year and a half. Coin prices
can be cyclical, similar to a sector mutual fund.
Whether you are just starting out collecting coins or if you
have amassed a huge collection, you need to take caution when
selling your coins. There are thousand of books and many Web
sites that seem to offer an endless supply of information.
With the Internet, there are many more opportunities for collectors
than ever before, however, there are also many more coin scammers
than ever before. If you are going to collect coins for investment
opportunities, you will probably be more profitable if you
deal with numismatic coins. You may want to purchase some
type of consumer protection guide.
Chances are that you or someone you know has collected a few
old coins through the years. Many people have large coin collections
and begin to sell them off to supplement their retirement.
Others pass the hobby down to their children and grandchildren.
Whatever the reason, coin collecting can be both fun and profitable.