Coin collecting is a hobby with many levels of participation. In fact, there are probably just as many ways to build a collection as there are collectors in the market! Many collectors got their start as kids going through pocket change and, as their knowledge and budgets grew, began building collections of increasingly more pristine examples. Others got involved in the hobby with an investor’s eye, developing collections of beautiful rarities by following the trends in the market. Whatever your interest or specialty, with a keen eye and some basic knowledge you can assemble a great collection of rare coins.
However you came to the hobby, the basics of numismatics remain the same:
- Understand the market
- Read, Read, Read! Knowledge is power when collecting.
- Seek out rarity, quality, and undervalued coins for the best returns
- Buy the highest-grade examples you can afford
- Buy what you love! Buy coins and build your collection in a manner that appeals to you.
Whether you’re creating a date and mint-mark set of Morgan Dollars, a U.S. coins Type Set, or a collection of Proof coins, educate yourself. Learn about market trends, grading, rarity and history, build a network of credible, honest, knowledgeable dealers, attend coin shows, and read everything you can get your hands on including old coin magazines and pricing trends.
Developing A Collecting Strategy
You don’t have to build a huge collection at the start. It can be a set of five perfectly toned Morgan silver dollars in MS66, or a mini date set of $2 1/2 dollars Indians in MS64, or even a mint state type set. Build the collection you want and one that you’re comfortable with. Collecting is a lifetime endeavor and half of the fun is in the chase. That being said, there are a few collecting tips that can help you along the way:
- Pick a reputable dealer – A good dealer can help throughout your collecting process. Every major collector and collection has had a dealer behind the scenes working with them. A good dealer can help you choose the right coins at the right time and avoid mistakes. Find someone that shares your love of the hobby, understands your strategy, and has the knowledge and commitment to help you succeed.
- Buy quality — Any great collection is made up of consistent high-quality coins. Don’t buy a coin to fill a hole in your collection, but wait for the right specimen. Always buy the best coin you can afford in the highest grade possible. Develop your collector’s eye. Eye appeal can often be the difference between an adequate coin and an outstanding example. Never pass on quality because a coin is 10 – 30% too much.
- Search For Coins With Genuine Rarity – In coin collecting, there are several different types of “rarity” you can look for. First, there is actual scarcity — for example, the 1867 Shield Nickel with rays has a total population of only 60 coins in all grades. Many Indian head pennies have low proof mintages of under 2000 or 3000 coins. Next is “key-date” rarity. These are coins in a series that have low-mintages and as a result are hard to find in the market. For example, the 1864-s $10 Liberty, of which there are about 20 examples known of its original run of 2500 business strikes. Finally, there is conditional rarity, or coins that are rare in certain grades. Some coins can have many, many examples in lower grades, but only a few hundred or less are certified in higher grades MS65 and above.
Build a strong relationship with a reputable dealer
As you begin to collect seriously, you should try to find a reputable dealer to work with long-term. Find a dealer that offers integrity, knowledge, a love of collecting, and an understanding of the market and your collecting goals. Ask around. Other collectors are always happy to recommend great dealers and will often tell you which to avoid, as well.
Check with professional trade groups like the Professional Numismatists Guild (PNG), the Professional Coin Grading Service (PCGS), and the Numismatic Guaranty Corporation (NGC). Many of these organizations will offer online databases of their member dealers to help you narrow the field. You can also visit trade shows to meet a lot of dealers at once. Many local coin clubs sponsor shows, which offers a chance for you to get to know your fellow local collectors. These collectors are a great source of inspiration, as well as information.
The bottom line is that building a collection of rare coins should be exciting, rewarding, and fun. Study, read, network, and be patient. Remember building a collection can be a lifelong pursuit that will pay you back with years of enjoyment and, if you choose wisely, financial dividends!