Many people collect coins as a hobby. For others, collecting coins is an integral part of their investment portfolio. With some knowledge and planning, you can build a profitable coin collection that increases in value each year.
What to Collect
Investors often make money from coins by looking for what they like. Successful stock market investors routinely get the most return on their money by investing in companies they like. Just like stocks, a host of factors affect the value of coins. However, investing in coins that interest you will give you more satisfaction than collecting random coins that may or may not appreciate.
Coin Values
If you buy a coin based on how much precious metal it has, you are not investing in coins. You are investing in precious metals. The two most common types of coin values are the bullion price and the numismatic price. The bullion price is how much precious metal a coin contains, and the numismatic price is a coin with an external value. Rare or historical coins often have a higher numismatic price than a bullion price.
Some rare coins can be worth 500 times or more than the spot price of gold, silver or copper. For example, a $20 Saint-Gaudens Double Eagle Gold Coin is worth up to $685,000. Since only a few of these coins are in existence, collectors or a coin buyer in Chicago might be willing to pay 500 times or more than the value of the precious metal contained within the coin.
If you are a coin buyer in Chicago, you should familiarize yourself with the market. Adding coins as part of your long-term investment strategy can deliver solid returns. It is your decision to either buy coins for their precious metal content or buy coins for their numismatic price, but it does not hurt to invest in both. Go to Chicago Gold Gallery to learn more.
