You can invest in coins just as you invest in stocks, commodities, currencies, and commercial real estate. The coin-investing market is influenced by the forces of supply and demand in the same way as the markets relating to assets like stocks and commodities. Buy and sell decisions are similarly influenced as the buy and sell decisions of other assets.
Before initiating a ‘Buy’ on coins
Before investing in coins, be sure the coins are genuine by checking with:
- The Professional Coin Grading Service (PCGS)
- The Numismatic Guarantee Corporation (NGC)
Both furnish a written guarantee of their conclusions on a coin's authenticity and condition. Both organizations are well-respected service providers in the rare coin industry. Investment in gold and silver coins is generally preferred. U.S. coins are more liquid than coins from other countries. As an investment option, coin investing may fare well or poorly, based on a variety of reasons.
Here are the two main categories of coin investment.
Rare Coins:
A rare coin is rarely found. A coin can be considered rare due to its:
- relatively low mintage (fewer coins minted or made)
- low survival rate
- holders not wanting to sell them
Rare coins can be bought at auction, coin shows, garage sales, and dealers. Genuine and truly rare coins are seldom traded on any exchange. Purchase of rare coins mostly takes place between knowledgeable dealers and avid collectors. Realize that by investing in rare coins, you are investing in an illiquid asset.
Gold Coins:
Investing in gold coins is safe and sensible. Your investment in stocks may take a hit due to poor quarterly results, but this will not affect your investment in gold coins. A good rule of thumb is to invest in gold coins up to 30 percent of your total capital allocation. Be sure that you buy gold coins from reliable sources.
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