November 22, 2004 07:20 AM
Investing in Rare Coins
Excerpt: If you intend to buy rare or bullion coins for investment, your best protection is to spend time learning about the coins you are being asked to buy. In the past, most investment gains have gone to collectors, often known as numismatists, who have taken the time to carefully study various aspects of coins, including rarity, grading, market availability, and price trends. Investment success over the years is the result of prudently acquiring coins of selected quality, proven rarity, and established numismatic desirability. Many careful buyers study coins for some time before buying even a single coin. Success also can be enhanced by researching dealers, as well as coins.
How To Protect Yourself
If you intend to buy rare or bullion coins for investment, your best protection is to spend time learning about the coins you are being asked to buy. In the past, most investment gains have gone to collectors, often known as numismatists, who have taken the time to carefully study various aspects of coins, including rarity, grading, market availability, and price trends. Investment success over the years is the result of prudently acquiring coins of selected quality, proven rarity, and established numismatic desirability. Many careful buyers study coins for some time before buying even a single coin. Success also can be enhanced by researching dealers, as well as coins.
If you receive any solicitation about investing in coins, keep these points in mind.
Use common sense when evaluating any investment claims and do not rush into buying. Remember, anything that sounds too good to be true usually is not true.
Make sure you know your dealer's reputation and reliability before you send money or authorize a credit card transaction. If you can, find out how long the company has been in business. Don't rely just on what a dealer's representative tells you on the phone. For example, if a dealer claims to be a member of a professional organization, call the organization and make sure that the claim is true. If you cannot confirm the reliability of the dealer, consider investing with another firm.
Do not be taken in by promises that the dealer will buy back your coins at or for more than the price you paid or that grading is guaranteed unless you are confident that the dealer has the financial resources to stand behind these promises. Many of the coin sellers prosecuted by the Federal Trade Commission in the last several years have not been able to meet guarantees and other obligations to their customers.
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