Investing in rare coins can be often be a fun endeavor and offer excellent diversification to your portfolio. Their main draw is that they are in demand and exceedingly more by the day. New issues cannot be minted of legendary or low mintage coins. As more and more people discover their beauty, history, and rarity, the demand will continue, thereby driving up prices.
Often rare coin investors will stick to United States Coins because they are the most liquid compared to other countries and those coins minted prior to 1965; the year after the final silver circulation strikes. Popular series’ are also the most often collected and invested. Lincoln cents, buffalo nickels, and Morgan dollars are timeless and as such prices reflect their demand and rarity.
Rare coins can be bought on places such as eBay very easily, but for the beginning investor it is best to stick to coins that are professionally graded by NGC, PCGS, or ANACS grading services. These coins are authenticated and given a grade between 1-70, 70 being a coin in perfect condition. They are also encapsulated in airtight holders to protect their condition and preserve the grading company’s pedigree.
Do not be surprised to see a difference of prices in the thousands of dollars for only one number difference in the grading scale say for example 65 to 66. This is very common and the grading is extremely precise. As a new coin investor, do not get caught up in these particulars and focus on overall appeal of the coin and issue rarity.
Rare coins are an excellent type of investment because they do not require a broker or legal paperwork to buy or sell them. Another excellent benefit is that you will physically own the coin, not just a piece of paper. If you are investing in gold and silver coins this can be even more rewarding!
Be careful though because coins may not always be so liquid as stocks. Finding a buyer for a particular coin may be difficult due to demand or a change in perception of value. Holding the coin physically can also be a problem because it requires safe keeping and the risk of damage or theft.
Surprisingly $100 or less can net you a really nice looking rare coin that will likely maintain its value and gain value for years to come. All of the key dates of each popular series in all grades has outperformed the stock market each year and will continue to do so for some time.
Be patient and buy on eye appeal and quality. Keep in mind demand and popularity as well so that you have a buyer in mind for the future. However, there are some excellent rare issues out there that are not popular which can be invested in for a lot less.