Coin Collecting Basics

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Before starting a coin collection, there are some basic points to consider.  As with any investment, you want to be able to predict what will happen as accurately as possible.  With rare coins, attention to detail can mean the difference between a profitable investment and a money pit.  Rare coins are an incredible opportunity, as long as you take some precautions.

As you seek out your rare coin, keep in mind that its condition is easily one of the most important factors that will be considered when it is time to resell it.  Even if you have a very rare coin that is difficult to obtain, most collectors will not be interested if it is scratched and unsightly.  Even if a coin is not as rare as far as being obtainable, if you have the absolute best version of it, then that gives it scarcity in its own way.  Ideally, you want to own something that nobody else has, which will make the demand that much greater, allowing you to set a higher price tag.

One of the most often overlooked aspects of coin collecting is how they are stored.  It is absolutely heartbreaking to see someone spend a small fortune on a timeless piece, only to have it damaged either by mishandling or due to the elements.  Even just letting a coin sit in the air for too long can have lasting negative effects.  It is so important that you take every precaution to avoid damage.  This means handling it properly, having it slabbed properly, and keeping it in a fireproof safe or in a safe deposit box at the bank.  You may also want to strongly consider taking out an insurance policy, depending on the value of your collection.

Smart rare coin investing requires that you know what you are buying.  To someone who does not know anything about coins, an “MS-68” may sound like an arbitrary jumble of numbers and letters.  To an informed coin investor, that means that the coin is “mint state” and in nearly flawless condition.  Coins are graded on a scale from 1-70, so make sure that you take that number into account before buying.

Remember, just because a dealer says a coin is graded one number does not always mean that is what it is.  Unless a coin has been graded by a top-tier third party service, you should always take the grade with a grain of salt.  Avoid buying coins sight unseen unless you are confident that it has been graded accurately.  There is nothing worse than trying to sell your coin later, only to find that one overlooked mark has destroyed your profit margin.

The final step is possibly the most important: finding a good dealer.  The source of your coins is going to determine whether you are paying the right price, whether the coin is accurately portrayed, and what your recourse will be if there is a problem.  You can also learn a great deal about coin collecting basics from a dealer who has been in the business and knows how to help.