Collecting coins is an extremely rewarding hobby for many people, but it can also be quite lucrative. If you’re interested in collecting coins as an investment, you should have some level of interest in coins, as this type of investment requires a fair amount of research.
With any investment, it’s important to be aware of the risk involved and what your end goal is. Are you investing money for a specific purpose? How long can you wait for a return on your investment? These are important questions to ask yourself before deciding how you should invest in coins.
Once you’ve decided what kind of investment you’re interested in; you can pick a focus for your collection. There are two common focuses for coin collectors who are looking to make some money from their hobby: bullion value, and numismatic value.
Bullion value is simply the value of the precious metals contained within the coin. So, a one-ounce silver coin’s bullion value equates to what an ounce in silver is worth at any given time. Focusing on the bullion value, you’re really just investing in precious metals. That means it’s important to understand the markets of the specific metals you have in your collection so you can buy bullion in Glenside low and sell high.
Numismatic value, on the other hand, is a bit more complex. According to International Precious Metals, an established U.S. coin dealer, “Numismatic fair market value is determined primarily by the scarcity of the coin, its condition, supply, and demand.” That means you have to have a lot more information about your coins, which takes time to research and can add cost to the initial investment by way of coin grading.
Coin grading is the process of appraising the numismatic worth of a coin based on five categories of its appearance: luster, surface preservation, strike, eye appeal, and coloration (CoinResource.com). It costs money to have coins graded, or you can purchase coins for your collection that have already been graded. These coins should come with documentation to prove their grades. Getting your coins graded through a professional coin grading company provides a level of security to potential buyers and allows you to ask for a higher price depending on the grade.
Ultimately, it’s a personal decision whether or not to invest in a coin collection. If you’re already collecting, consider looking into what your current collection is worth, or visit a coin shop in Flourtown to get a value. From there, you can use your interests and investment goals to decide whether coin collecting as an investment is right for you.