Investing in Rare Coins

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Investing in coins, such as rare silver coins or gold, gives you a profitable investment and a way to expand your current portfolio with more diversity. There are two main ways to invest in rare coins, including the metal content of the coin or its numismatic value. In the past, the rare coin industry was only made up of collectors, but now many of those collectors are dealers for investors who are looking to benefit from these coins. And more buyers are finding advantages to this investment, as you will read below.

Advantages of Rare Coin Investing

While inflation to a severe degree hasn’t happened in a long time, it could always rear its ugly head. A great way to battle the potential devastation following inflation is with safe investments like rare coins. Coins are a safe and affordable investment that has the potential to rise in value but rarely decreases in its value. Rare coins also help you to diversify your investment portfolio, which is essential in today’s market. Your rare coins are appreciating in value as well as being tax deferred. If you have had them for six months or more, they are only taxed at the lower capital gains rate. There is also the benefit of them being a more liquid investment when it comes time to sell the coins you have purchased.

Disclosure of Your Investment

Another benefit to rare coins you might not be aware of is the fact that you don’t have to give disclosure of your investment. With stocks and bonds, this information is disclosed on taxes and they also comply with the Security and Exchange Commissions. However, if the value of your rare coins is 15 percent higher than the metal content in the coin, it does not have to be reported. This allows you more privacy with your rare coin investments. And of course, having a portable asset is always advantageous.

How Rare Coin Investing Works

The coin investing process starts by finding a reputable dealer. There are two main types of dealers: retailers and wholesalers. The retailer receive their coins from a  wholesaler, while the wholesale is responsible for visiting auctions, bringing new coins into the marketplace for investors and retailers and often are responsible for advertisements. Wholesalers commonly sell rare coins in sets or in bulk to retail dealers. As an investor, you can get your coins from a wholesaler or retailer.

One of the most important things in buying rare coins is knowing who you are buying from. You will no doubt want to ensure that they are certified by the American Numismatic Association and Professional Numismatists Guild. Both are important for showing the dealer has experience, knows how to grade coins and provides an honest and fair price to the buyer. A good code of ethics is very important for a dealer to be on the top of your list.

Do Your Research

You should also be doing some research on your own to learn more about coins and their value. Look up the estimated value of a rare coin before you invest in it. But remember the number is only a guideline, and not necessary the actual value of the coin. The lower the quality of the coin, the higher the dealer’s profit margin is because these coins are harder to sell.