Tips for Buying and Selling Coins
A quick guide to investing and collecting.
If buying and selling coins have sparked your interest, consider why you’re venturing down the road of collecting. Do you want to collect coins for the thrill of it, or are you interested in making a financial investment for your future? If you’re new to collecting, it’s important to understand the difference between collecting and investing. This week, ONR offers a quick guide to an age-old pastime.
Collecting vs. Investing
While some don’t see the difference between collecting and investing, there are differences. Some coin enthusiasts build their collection of rare or numismatic coins because it’s an exciting hobby like treasure hunting. Others see coin collecting as a financial investment, much like buying real estate. Investors base their coin purchases on the gold standard (a.k.a. standard bullion), knowing the coins may someday offer them financial security should they need to sell down the road.
Standard Bullion vs. Numismatic Coins
This is an often-misunderstood topic for those new to coin collecting. Simply put, standard bullion are coins made of nearly all gold, backed by the government and purchased as an investment. Numismatic coins are valued based on history, rarity and their condition. Though some rare coins are made of gold, gold content is not the only factor when defining the value of a numismatic coin. Overall, people searching for bullion coins are typically not collectors.
A Good Investment
As an investment, standard bullion gold coins, unlike paper currency, will retain its value. Even as the price fluctuates, it will never experience the highs and lows of its paper counterparts, as it’s always worth face-value, if not more. Bullion is always attractive to international markets and is always in high-demand, especially during a crisis. Another factor to consider is, unlike your non-tangible portfolio of financial investments, you can physically hold your gold coins in your hand, giving you the freedom to hold on to or even travel with your assets.
Unlike these investments, gold doesn’t require any further costs or care other than having a place to store it. Even if you choose to pay for storage, that’s nothing compared to taxes or other costs associated with investment property, for example. The bottom line, buying bullion coins can be pretty straightforward. They are bought and sold easily, can be used as currency at any time and will always be worth it’s face value.
Coin collectors are those in search of numismatic coins. Unlike investors interested in ROI, coin enthusiasts are modern day treasure hunters in search of rare coins, in pristine condition and will add some sort of symbolic or historical value to their collection. Unlike a standard bullion coin, however, numismatic coins can be costlier because these coins are valued on rarity and demand not just it’s gold content. Much like collecting art, coin collecting requires a lot of education and the ability to discern a real find versus a fraudulent one, at an inflated price.
If a coin was passed down a few generations or maybe you came across one at an antique store, you should always consult with a trusted coin dealer to appraise its value. Novice collectors can easily be deceived by a seller looking to take advantage of someone less educated in numismatics. If you’re looking to get into collecting for a hobby, take the time to educate yourself and consult with the right coin dealer.
ONR is one of Pittsburgh’s top coin dealers and authorized precious metals distributor in gold, silver and platinum bullion products. Visit us for all your buying, selling and collecting needs! Located in the heart of Pittsburgh’s Strip District, call or visit us anytime – 844-667-2646!