Are Collectible Coins a Good Investment?

Is it a Good Time to Buy Collectible Coins?

Many precious metal investors will tell you that there’s almost never a bad time to invest in the precious metals game and this is especially true as it regards collectible coins.  Precious metals like gold, silver, platinum and palladium are always in demand and will continue to be so. This is especially true as it comes to telling signs of inflation and the suggestion of an economic downturn. So, yes, this is a seize the day moment if you’ve ever had an interest in buying collectible coins.

How do I Begin Collecting Coins?

Collectible coins are treasured by many investors. Many famous people are known to be avid collectors: J.P. Morgan, the Hunt brothers, Wayne Gretzky and Nicole Kidman to name a few. And they all started from scratch, just like anyone stepping into the world of collectible coins today.

With a little research it’s easy to jump into the marketplace and find the coin or coins for you. It’s simply a matter of going online and/or visiting your local coin merchant. But new coin collectors shouldn’t just follow the advice of merchants. A coin collector should put a focus on becoming experts themselves. 

And this is done by asking questions of merchants about quality and value and searching for specific collectibles online and paying attention to buying and selling trends. Study coin values, their denominations and rarity. Follow up with trade magazines, learn which questions to ask and then consider what aligns with your personal taste or interest as it comes to stepping into the profitable world of collectible coins. 

How is the Value of a Collectible Coin Determined?

The value of a collectible coin is determined by the physical metal in the coin (known as its ‘bullion value’) and its numismatic value. Let’s have a look at each and what they mean. 

The bullion value is easily determined by assessing the quantity of gold, silver, palladium or platinum in a collectible coin. Generally, this refers to the number of ounces that are stored in the coin. Multiply this by the actual spot price per ounce of the precious metal at any given time. This is the bullion value of your collectible coin. 

Numismatic value is a slightly different factor as it comes to determining the worth of a collectible coin. Generally, this determination is applied to rare and antique coins and is based more on rarity and even the sentiment of the coin’s owner. This determination is a bit more subjective and can vary as a result. 

The condition of the coin is also taken into account. Uncirculated collectible coins often draw more interest and, thereby, are awarded a higher value. This isn’t to say that circulated coins are not a good investment, but an investor should expect a lower return as it comes to coins that display or suggest usage. New is new and used is used so consider your options accordingly. 

Collectible Coins Are For More Than Just Collecting

Are collectible coins a good investment? Coin collecting can be for everyone, and the investment potential is high. For serious collectors or investors, coins are a tangible asset that easily hedge against inflation while also adding some solid diversity to your portfolio. 

Just know what you’re looking for and understand your investment goals. If you just want as much weight as possible, then your goals aren’t building a collection and you should avoid the high-premium coins. A little research goes a long way and, as always, before you commit to any actual investment be sure that it’s for you, suits your needs, fits your direction. Happy investing!

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