Rare Coins As An Alternative Investment

rare coin investment portfolio

by Scott Hopkins

Rare coins make excellent alternative investments for the youthful investor’s portfolio. Rare coins are a type of investment based on scarcity, and demand, in the most simple terms. Unlike investing in stocks, coins are held in their physical form, and must be kept in pristine condition to maintain their high value and/or rarity. Yet, they are purported by some to out-gain most stock indexes! Rare coin investments might be the perfect investment vehicle for you.

Investing in rare coins can often be a fun endeavor, and they offer an excellent diversification to your portfolio. The rare coins main attraction is that they are usually in consistent demand. New coin issues cannot be minted with legendary, or low mintage, coins. Therefore, as more and more people discover their beauty, history, and rarity, the demand will continue, thereby driving up the prices.

Often, rare coin investors will stick to United States Coins, because they are the most liquid compared to other countries. Also, many investors stick to rare coins minted prior to 1965; the year after the final silver circulation strikes. Coins minted from 1965 and beyond, are sometimes far to common. Popular series’ are also the most often collected and invested.

[The Guide Book Of United States Coins is the essential guidebook each year, and will pay for itself over and over again.]

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. There are usually some excellent rare issues available that are not currently popular which can be invested in for a lot less money.

Rare coins are an excellent type of investment, because they do not require a broker, or legal paperwork, to buy and/or sell them. Another excellent benefit of rare coins, is that you will physically own the coin, and not just a piece of paper. Additionally, if you are investing in gold and silver coins, having no broker or paperwork fees will be even more rewarding for you.

Be careful though, because coins may not always be as liquid as stocks. Finding a buyer for a particular coin may be difficult, due to a decrease in demand, or a change in the perception of value. Holding the coins physically can also be a problem, because they require safe-keeping, and there is 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 coin series in all grades, has outperformed the stock market each year, and will most likely continue to do so.

Scott Hopkins writes about stocks, and investing strategies, but also enjoys writing about alternative investments, such as rare coins.

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