Rare coin investing can be a fun and exciting way to invest.
Instead of simply trading paper as you do in the stock market, you can have a tangible asset that you can collect and enjoy the beauty of it as well.
The investment banking firm Salomon Brothers has been following the performance of a basket of collectible U.
S.
coins suitable for coin investing since 1978 and they have tracked the performance of the rare coin market versus the DOW, bullion, treasuries, and even crop prices.
The wild fluctuation seen in the stock market are not really noticeable within the rare coin market - the returns over time are relatively on par with the DOW, exceed other tangible asset classes like bullion and kept ahead of the consumer price index.
The results are actually quite incredible and it is somewhat astonishing that more people are not participating in rare coin investing.
The speculative nature of what truly constitutes the value of a coin is probably a major reason that many people do not invest.
After all, the intrinsic value is merely attached to the value of the metal, but the rarity factor and the existence of a solid, well-established market that has no prospects of going away should make people more apt to invest in the rare coin market.
So what kind of rare coins should one invest in? Well, most people think that you have to have the highest grade coin of the lowest mintage year to really be worth investing in.
Not so, many of the coins that were apparently tracked by Salomon Brothers were coins that were moderately rare and more easily obtainable by the average investor.
No doubt, high-grade extremely rare coins bring in the highest dollar amounts, but the pool of investors is also extremely limited.
Moderately priced coins graded by reputable companies like NGC and PCGS are probably the best choice for many investors and collectors.
Not to be too vague, but what you invest in is really up to you.
You need to do research as you would if you were investing in stock in a company.
Take a look at what you like and track the performance over the last 5,10, and 15 years periods.
See if the rise in value has been strong or falters.
Take a look on eBay - are their a lot of those coins available? When one comes available, is there a strong bidding trend.
These kinds of things can clue you into whether or not a particular coin might be a good investment.