According to Market Watch there are 7 to 10 million people in the United States who are serious coin collectors, and many view their coins as an investment. Of course, the coveted pre-1933 rare gold coin, such as a rare Double Eagle gold coin is on top of everyone’s want list. However, high end silver and copper coins are worth investing in too.
To successfully collect rare coins as a way to build wealth Market Watch suggests you have an interest in rare coins. This is because you must have a working knowledge of the coin market. You must know which way the market is flowing and be on top of current trends. Failing to heed this advice could mean you pay too much for coins, and you could end up being a victim of counterfeiting. Both of these unpleasant circumstances will negatively affect profit margins.
One way to ensure a solid return on investment is to only invest in US rare coins that are popular with coin collectors. Morgan Dollars, the Lincoln Cent, and Indian Head Nickels are in vogue. Coins that are hot today tend to stay hot for a long period of time, meaning certain coins are always wanted by collectors.
The Professional Coin Grading Service says some collectors have begun seeking rare coins for investment purposes rather than simply collecting for historical or artistic value. This trend was likely caused by the Great Recession, when stocks fell and banks had to be bailed out. Precious metal value in gold and silver bullion coins skyrocketed. Rare coins too have precious metal worth, however rareness, grade, and market demand traditionally dictate what rare coins is really worth to coin collectors.
Is rare coin collecting as an investment right for you? Rare coin investing is a long-term venture. This is because many coins increase in value as time passes. You must be willing to hold onto your coins for at least 5 years. In addition, rare coins can be used as a hedge and should be part of a diversified investment strategy. Putting all of your cash in one basket is not a recipe for success. Many coin investors collect rare coins to build wealth and invest in bullion coins like the American Gold Eagle as a safe haven, against inflation and falling stocks.
You must know two things when you buy rare coins; know what you are buying and you must know the seller. This is where having knowledge of rare coins come into play. You must be familiar with mint dates, and be able to identify the condition of the coin. Coins graded by a trusted third party ensure the coin is genuine and properly graded. Know what you are looking at before you commit to buy. This is the way to build wealth from rare coins.
Rare coins are old vintage coins and rarely look new unless they are uncirculated or ultra-high end coins. In other words, stay away from modern rarities advertised on TV. These gleaming coins are privately minted and are not real collectible or investment grade coins. Authentic rare coins and bullion coins minted by the US Mint are the only coins you want in your portfolio. If it sounds too good be true it probably is. If a dealer is trying to sell a coin below wholesale value you must ask yourself, what’s the catch? Again, know the person or dealer who you intend to purchase from. Longevity in the rare coin business is the first thing you should look at when you choose to build wealth with rare coins.