Collecting Rare Coins: It’s Not Just For Hobbyists Anymore!
Collecting rare coins is a hobby that has been shared by kings, famous actors, writers, sports heroes and people from all walks of life since the time of King Midas 2700 years ago! Today, experts estimate there are between 7 and 10 million serious collectors in the United States alone. Many of these collectors regard their collections as investments in the same category as antiques, fine wines, and art.
For most of these collector/investors, the allure of coin collecting isn’t the financial gain. They admire the history behind their coins, the aesthetic beauty and artistic way they shimmer in the light. They are collectors because they are fascinated by each piece, and they are successful because of the time they’ve spent admiring coins, studying them and building up a knowledge base to be able to make smart “investments” as they build their collections.
For the novice collector, there are many potential pitfalls they need to be aware of as they become more serious about the hobby. Most dealers are legitimate and reliable, but there are some who are less than honest. Counterfeits exist, coins may be cleaned or altered, false claims of rarity, overpricing and theft are all very real pitfalls that need to be avoided.
The best way to avoid problems is through knowledge. You need to educate yourself about the hobby, how coins are graded, what makes a coin “rare,” and you also need to find a reputable, knowledgeable dealer to help you build your collection. Coin collecting today has been made easier by the entry of third-party grading services like PCGS and NGC who not only guarantee the authenticity of coins they’ve “slabbed” but established standardized grading practices that have stabilized the numismatic industry.
So how does a new collector build a quality collection? Let’s look at some best practices that can help you to choose wisely and build a collection that you will love for many years, and when you’re ready to sell maybe even make a nice profit on your “investment”.
Building Your Collection
Today, many experts say that classic U.S. gold coins and high-grade silver and copper coins authenticated and graded by third-party grading companies like PCGS or NGC are among the best buys in numismatic collecting today.
If you are new to the hobby or considering starting a collection the best investment you can make is in education. Speak with other collectors, join a coin club, meet some dealers, attend coin shows and auctions, do anything you can to build your knowledge base. Find a series of coins that interests you, like Indian Head cents, or Morgan silver dollars and begin your studies. Read books, browse the web, check auction histories, learn about census populations for each grade (this information is available on the PCGS and NGC websites) and just develop a good general knowledge of the series you’re interested in.
There are many different types of collections you can build. Some collectors only collect proof issues, some build date sets consisting of an example of every date and mint mark for a particular series, some build type sets consisting of one specimen of each series of coin that’s been minted. Whichever type of collection you choose to build, first take the time to educate yourself, before you begin investing.
Books Every Collector Should Own
There are literally hundreds, even thousands of books about coin collecting that can help you build your knowledge base. Here are three that should be in every collector’s library.
• A Guide Book of United States Coins – by R.S. Yeoman, Whitman Publishing
Often called the “red book” by collectors, this is an annual publication that includes a history of US coinage, numismatic terms and photographs for every US coin series issued since 1793 including composition, denomination, design descriptions, how many pieces were struck each year and more. It also includes the value for each.
• PCGS Guide to Coin Grading and Counterfeit Detection – John Danreuther, House of Collectibles Publishing
• Photograde: Official Grading Guide for US Coins – James F. Ruddy, Zyrus Press
If you choose to collect “raw” coins (not graded by third parties) knowing how to accurately assess and grade coins is a crucial skill you will need to develop before you begin investing. While grading standards have stabilized, there still is an element of subjectivity. Coin grading is crucial. For certain issues the difference between a coin graded MS63 and one graded MS65 can be worth thousands of dollars. In order to pay a fair price, you need to be able to accurately assess the condition of a coin. These two books will give you a basic knowledge of grading.
Find A Reputable Dealer!
Building your collection and your knowledge base can be easier if you find a reputable dealer to work with. They can help you to find particular coins to fill your wish list, and when it comes time to upgrade your collection, can broker the coins you own.
When searching for a reputable dealer there are several organizations that can help steer you in the right direction. The Professional Numismatics Guild is a membership-only organization that dealers are invited to join. They must meet very strict criteria in order to be considered for membership and have a list of member dealers available online. You can also research dealers through PCGS, NGC and the Industry Council for Tangible Assets or ICTA.
Building a rare coin collection can be fun, exciting, and a great investment. Arm yourself with knowledge, find a reputable partner dealer and get started today!
SOURCES:
http://www.marketwatch.com/story/how-to-follow-the-money-in-rare-coin-collecting-2012-09-06
http://www.pcgs.com/news/collecting-rare-coins-a-great-hobby-with-wonderful-options-part
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