http://www.nuwireinvestor.com/howtos/how-to-collect-coins-as-an-investment-59367.aspx BTW - it is a big question if coins are a reasonable investment vehical.
That article is overly simplistic at best, and is more likley to be classified as just plain bad advice. Now I am one of the more positive folks on the board about coins as an investment, but these are the things you need to overcome. 1. The large spreads between buy and sell 2. Overpaying for your coins (We have all done it) 3. Getting taken by countrfeits 4. Storage and insurance costs 5. Possible theft of your coins 6. Market swings as particular series go in and out "of style" 7. Paying for books and research materials. 8. Grading fees Whew, and the list goes on. So how can this be a good investment? Well as a pure investment, I agree with most folks when they say "Don't invest in coins" It is not a good place to sink your money as a pure investment. I don't look at it as a pure investment though. I look at it as a hobby with an eye towards investment. Sort of a hybrid investment. Something you can enjoy with the possibilty of a return. So I treat the buying of coins as an investment. I am thinking of selling even before I buy the coin. I try to buy quality coins at a fair price. I might not always be succesfull, but I try. It takes time and patience and even then, mistakes are made. I do not get hung up over a must have coin. If the price is too high, move on. You can always find another must have coin. By not collectiong sets, it keeps me from getting desparate for a coin and possibly overpaying just to fill the hole. It also keeps me from buying lower quality coins for the sake of filling holes that have less of a chance of appreciation. I also am always on the lookout for buyers. Here at work there a group of collectors I sell to on occasion . If I can turn a profit a coin I will do it it and roll it into another coin. My collection is small, so turning some coins over keeps it fresh and intersting. I may never turn a profit off my collection, but the fact is that coins in the past have appreciated in value so I might as well try. In 15 years or so maybe I will show a profit but if I don't, I have had the enjoyment off collecting and maybe my style will have kept me from not losing quite as much. Mike
Coins are the easiest investment that I've ever dealt with. All you have to do is have a general idea of grading standards, make a few ebay scans, get in low and sell high. Every single series except Morgans advanced well beyond inflation rates from the 80's-2009. In one sitting I can scan over 2,000 coins online find 1 or 2 with potential and make a quick purchase. At the bare minimum I'm not going to be at a huge loss when I go to sell. These people that believe in investing in the stock market and U.S. treasury bonds are the ones who really baffle me.
Interesting. I have been thinking about this a lot recently myself. I read an article by Peter Schiff about it that is very pessimistic about collectible coins as an investment. Now, I completely agree with him that numismatics are a terrible investment. But then again so are stocks. The key to investing is diversification. So bullion might perform well in a down economy, but it doesn't hurt to have some investment in a coin collection, or a Picasso, or Issue #1 of Action Comics, in case we actually don't end up in financial armageddon. Now, coins and art and comic books are all awful investments. But if you love coins, then by all means collect them. They do have some value, it doesn't hurt. It's better to spend your money on coins than cable television and junk food or wasteful pleasures. It just makes sense to enjoy hobbies that provide an investment as a byproduct. This applies to things like collectibles, but it also applies to things like athletics, which is an investment in yourself, or hobbies like gardening or something where you learn a valuable skill. Not that there is anything wrong with frittering away your time on something valueless if you truly enjoy it, but from an investment perspective, it is smart to do something with your leisure time (and entertainment budget) like coin collecting, rather than a hobby that is entirely wasteful.
You want to be the guy who bought it from the guy who "sold low" As with many things, stocks, real estate being very good examples, the old saying applies. You make your money when you buy. If you are a collector, you will likely buy what you want, not what you can sell for a profit turn. If you want to invest in coin, you have to look at it through those eyes. Its two very different kinds of buying.
Yes, but a preditor has to understand his prey. So you still need to understand the collectors state of mind and have a discriminating eye.
If I were buying coins from a purely investment standpoint, then I would not buy "coins". I would buy one coin, or maybe a few coins. For one thing, the higher end coins tend to appreciate more steadily. And, even in the case where all coins appreciate equally, you will lose money moving two hundred $100 coins as opposed to one $20,000 coin.
Jason, I have to say you are all over the place here. In this post you are say it is so easy and all you need to do is buy low and sell high. You also state state that coins are the easiest invesment that you ever dealt with. Yet in another post you are asking for help becuase you have 10 large in coins and you want to know want to know what to expect when you sell. In that post you don't know if it is better to go to a B&M dealer or pay you boss 10% to use his ebay account in addition to the normal 9% sellers fees. It seems to me for someone who thinks this is the easiest investment, you should have these questions worked out by now.
I agree with Mikem's posts. Bottom line, there are people who may successfully invest in coins. Most are called dealers, so its not really investing its running a business. Advanced, knowledgable collectors MAY profit from coins, though with high fees built into the hobby it would be hard most of the time to beat inflation. Of all of the "investors" in rare coins, maybe 1 in 100 are successful. This is why its just as good advice to never invest in coins as to never clean a coin. Both MAY be violated, but takes a LOT of knowledge in order to do it properly. Most collectors cannot, because they are COLLECTORS, and fall in love with coins and have irrational exhuberance and overpay for certain ones.
