Investing in Collectible Coins - Which Coins Make the Best Investment?
By Simon Ashley
Some coins appreciate in value more than others and other coins depreciate in value. Here are some tips for those who wish to collect coins as a future investment and how to find those coins that are most likely to grow in value in the coming years.
First I should start by stating the benefits of investing in rare coins over other forms of collecting.
Rare coins can grow in value considerably over relatively short periods of time, by anything from 3 to 10 fold their original value. A sought after and rare coin that was valued at $1000 in the 1970s could be worth in the region of $10,000 today.
The supply of rare coins is diminishing daily which can mean any increase in demand results in increased prices. Unlike other markets like the stock market the supply of rare coins cannot be increased to meet new demand. This inevitably results in higher prices.
The liquidity of collectible coins is higher than other collectibles. Also pricing information is updated regularly so when the time comes to sell, you can expect immediate payment.
Coin collecting is affordable and there are coins to fit any budget. If you're collecting diamonds or rare paintings these can fetch prices that are out of reach of most investors and prices tend to be higher. With coin investing you can collect coins worth anywhere between $100 and $10,000.
Unlike other forms of investing you do not have to pay taxes on your profits until you sell.
Now what Coins are likely to appreciate in value the fastest in the coming years?
Coins of a High Grade
It is true that quality matters when it comes to coin collecting. Coins of a high grade tend to appreciate in value the fastest with those graded at over MS63 or PR63 doing particularly well. This is because high grade un-circulated coins tend to be more expensive because they are of higher quality and expensive coins have always tended to increase the fastest.
Rare coins almost always appreciate in value particularly if they are of a high grade. Coins minted prior to 1934 are good buys. The US stopped minting coins as legal tender in 1934 and only a small percentage minted before 1934 are available on the coin market today. As time goes by more of these will be lost or damaged making the coins of a higher grade even rarer and more valuable over time particularly as demand increases.
Gold coins minted before 1933 are also particularly rare as the US government recalled gold from its citizens in 1933 during the great depression. These coins should rise dramatically in value whether or not gold bullion prices go up.
Good Coins to Invest In
When demand goes up as it inevitably does some coins are certain to increase in value. These are popular and well known and documented coins that are no longer minted. For example the $20 Saint-Gaudens, Walking Liberty half's, Morgan silver dollars, and Buffalo nickels. While supply will continue to fall due to neglect, meltings etc demand will continue to rise for these rare and popular coins.
Coins Containing Precious Metals
Gold and silver coins have a proven track record going back 6,000 years and coins composed of precious metals possess intrinsic value. Precious metals such as gold and silver have been appreciating in value and provide a safe investment in troubled economic times. This is particularly true of silver which has many industrial and decorative uses and where the growing supply shortage of silver will only drive up prices further.
Visit the author's blog where he provides a list of Morgan silver dollar values essential for anyone buying or selling these popular coins. Also discover what the top collectible gold coins are on the market today and how to estimate their value.
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