August 21st, 2013
Coin investing seldom for the short term
Coin collecting and investing don’t always go hand-in-hand. And it’s certainly not for those who think they’re going to make a quick buck by simply dipping their toes into the hobby. That’s not to say you can’t make plenty of money off your passion. But there are a few key points to keep in mind before you go from hobbyist to profit hunter in the world of coin collecting.
Think long term – Coins can be a great investment . . . as long as they are something you are committed to for the long haul. Those hoping to score in the short term might just be better off hitting the slot machines at a local casino. Unless you know about an arbitrage opportunity – in which you can purchase a coin and immediately turn around and sell it for a higher price – go into this investment with a buy-and-hold mindset to give your coin time to appreciate in value.
Buy what you know – It’s easy to look at the going prices of some older coins and wonder if there’s money to be made. But one safe bet is to make sure you know what you’re getting yourself into before you commit to any purchase. Just because a coin is old doesn’t make it rare or even valuable. And just because a coin seems like a safe bet – such as gold or silver bullion – doesn’t ensure that it is guaranteed to be a sound investment. Understand the market and the manner in which prices for any piece might fluctuate before you plunk down a big chunk of change. The more you know, the better off you’ll be.
Keep everything in perspective – So you bought a coin, thinking it would make a great long-term investment. Until you go to sell it and find that there’s not as much interest in the piece as you’d hoped. While this may often be the exception to the rule, it can happen. Just make sure that enjoying the pursuit is the primary concern and that making a profit is simply a secondary focus. If you manage to keep your hobby in perspective, you’ll be a happy collector in the end, regardless of how much you gain on your investment in coins.