Investing in Coins; More than Just Making A Profit

There is a popular misconception that investing in coins means buying rare and expensive items that will some day be worth far more than what was originally paid for them. You supposedly purchase a coin or two, wait six months or a year and then make a lot of money by selling to someone else. That is a nice concept, but it is far from the reality of how and why people save old coins.

B. B. Craig, of the U.S. Mint, hands out Gettysburg National Military Park quarters to young collectors
B. B. Craig, of the U.S. Mint, hands out Gettysburg National Military Park quarters to young collectors

Yes, many collectors have made handsome profits when they sold holdings, but most of them never thought of their coins as investments. They enjoyed collecting coins as a hobby. Nearly every collector I have ever known who made a profit on his or her collection did so without giving any thought to profit as an objective. The coins these people bought were selected because they wanted to own them as curios or items of interest and beauty. The pieces went up in value because they had been carefully selected, and were in demand by others who also wanted to own them for similar reasons.

Another observation about the people who have made money on their collections is that they usually have held their coins for a period of three to ten years. It is rare for coins of any kind to appreciate in value over a short period of time. The market just doesn’t work that way. There are occasional spikes that drive prices up dramatically, but it is just as likely for prices to fall equally fast. Over a long period of time these fluctuations average out and values tend to go up with increased interest in the hobby by a new circle of collectors.

If making a profit on coins is one of your goals, remember to carefully select material that appeals to you, and will some day have that same appeal to others. Then plan to hold (and enjoy) your collection for a reasonable period of time.

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