Gold coins are a beautiful addition to any collection and a key area for collectors. If you are an investor, numismatics are probably not for you, as they are priced very differently from bullion coins. Building a gold coin collection is a different kind of investment, much more like collecting art or fine wines. The monetary aspect is secondary to the historical and artistic pleasure collectors receive from their collections, but that doesn’t mean that, given time, your investment can’t provide solid gains as well!
Understanding The Market
Investing in numismatic gold can be very profitable, but—like any investment—it is possible to lose money. Gold coins offer no guarantees. But, because there do have value in their gold content, your losses can be limited. Unlike investing in bullion, which relies strictly on weight and the daily spot price of gold, numismatics require a deeper understanding of the underlying market for rare coins.
The numismatic gold coin market is not as liquid as the bullion market, meaning that finding buyers (and sellers) may be challenging at times. This is why working with a knowledgeable numismatic expert can help. An expert can guide you to the most profitable decision when buying and selling your coins.
Do Your Research!
The best advice for investing in numismatic gold coins is to first buy the book! Gaining knowledge is extremely important when investing in coins. You need to not only know what the current market prices are, you need to consider trends and how the market may change in the future.
Read everything you can get your hands on regarding different coin series, pricing trends, histories, and more. You can use price guides and coin magazines to gain knowledge and understand general value trends, along with grading service websites and blogs like the PCGS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corporation) websites. Another great reference book that should be in every collector’s library is Walter Breen’s “Complete Encyclopedia of US and Colonial Coins,” which offers deep insight into the various series, their rarity, and history.
Numismatic Gold Is A Classic Long-Term Investment!
Like any investment, you should take a long-term perspective when buying numismatic gold coins. The key is to build your collection slowly, being very selective in your purchases. Plan on holding your coins for at least ten years to weather any fluctuations in the market. Numismatic coins operate very differently than bullion. The market can fluctuate wildly, with certain issues and series falling in and out of favor over time.
The benefits of collecting rare gold coins lie not only in the financial opportunities offered, but in the hours of joy you receive from your collection. Nothing is as exciting as stumbling across a coin on your wish list at a flea market, garage sale or coin show. That’s half the fun of collecting—building your collection and the stories you gain along the way!
Keep in mind that gold price fluctuations can be tremendous buying opportunities for collectors as well as investors. When gold prices are low, you may be able to find better deals because collectors may be eager to sell. This is where keeping that long term perspective can really pay off!
Work With A Qualified Rare Coin Expert!
One of the best resources for both knowledge and building your collection is a trusted dealer in rare coins. The dealer can guide you to the most profitable and wisest decisions when buying and selling coins. Finding a qualified dealer starts with research. Several organizations can help. If you’ve found a dealer you may be interested in working with, check to see if she or he is a member of any of these trade organizations:
• Professional Numismatists Guild (PNG)—This is a non-profit trade organization that thoroughly vets members before they are allowed to join. PNG members live up to a very strict set of guidelines and have been vetted by their peers for honesty, integrity and ethics. The Guild publishes a list of member-dealers online.
• NGC (Numismatic Guaranty Corp.), PCGS (Professional Coin Grading Service), CAC (Certified Acceptance Corp.)—These third party grading services are not as strict as the PNG, but they all do some vetting and research on their members. A dealer who is a member of any of these organizations is another good gauge of their integrity and expertise.
• ICTA (Industry Council For Tangible Assets)—This is an industry watchdog that works to protect investors in the market. If your dealer is a member in good standing in the ICTA, you can be assured the dealer is reputable.
Investing in and collecting numismatic gold coins is a fun hobby that can pay off. Work with a qualified dealer, take a long-term perspective, learn about coins and build your collection. It can be a fun endeavor that will provide years of pleasure!