Coin Collecting As An Investment
Coin collecting can be an enjoyable hobby as well as a great way to invest in your future. If you choose the right coins to buy and get them at a good price their value will be likely to grow over time. Savvy collectors will see as much, or more, profit with their coins as they would with more traditional investments such as bonds or IRAs.
The intrinsic value of a coin is based upon it’s metal content. Due to the rising value of silver, coins containing silver have risen in price. However, there is more to the value of a coin than just the metal content. If you are interested in buying coins primarily for the silver value I recommend 1960 to 1964 Roosevelt dimes and Washington quarters in circulated condition. These coins are common and can be obtained at a price very near the silver value.
At the time of this writing silver is at $16.55 per ounce. At this rate 90% silver coins have the following metal values:
- Dime $1.20
- Quarter $2.99
- Half $5.99
- Dollar $12.80
Most coin collectors are interested in more than just the metal value of the coins they buy. A coin may also have added value because of its rarity. The more rare a coin is, the higher its collectable value will be. That is why just a difference in the year of mint or the mint mark can make a tremendous difference in the value. It is also why a small copper cent can sometimes be more valuable than a silver dollar.
If you want to collect coins for their rarity value you will need to become very familiar with the grading process. With collectable coins condition is paramount and the difference in value from one grade to the next can be very significant.
When you buy coins for your collection/portfolio you want to get the best possible price. It is important to shop around and compare as there are many retailers who ask inflated prices for coins with little or no value. Flea markets and pawn shops are good places to look for coins.
If you do your research and learn which coins have the potential to go up in value and you learn about the grading system you will be able to build a nice coin portfolio which will increase in value. Keep in mind that the criteria for grading a coin can vary a great deal from one type of coin to another. Generally speaking, the more common a coin is the higher the criteria is for grading it.
By familiarizing yourself with the grading process you can avoid paying too much for over-graded coins. If you pay for a Fine specimen and you get a coin that is only Good or Very Good you are, in essence, losing money on your investment.
Avoid the coin ads you see in the newspaper or on television. These offers are almost always over-priced low grade coins.
The U.S. Silver Eagle Dollar
Many people who invest in silver buy Silver Eagles which contain one full ounce of silver. In addition to their intrinsic value Silver Eagles also go up in collectible value. Some dates become more valuable than others, which is usually based upon the number of coins minted in that particular year.
It should be noted that Silver Eagles are minted in large numbers and are not circulated. This means that these coins should only be collected in Brilliant Uncirculated condition.
Other Collectable Coins