If you want to add more diversity to your investment profile, you should look beyond gold bullion coins. Much like gold coins, rare coins are liquid assets and are accepted universally. There are people who have traded these coins for unbelievable prices. With rare coins, there are two things you need to know –
- Intrinsic value – This refers to the value of precious metals that the coin is made of.
- Numismatic value – Beauty, history, and rarity of the coin.
Expectedly, there are no fixed norms for buying rare coins, and therefore, new investors have to be careful about their first purchase. Here are some of the things you must follow.
- Learn about rare coins. There are many websites that offer incredible information and details on rare coins. You will also find books on rare coins. Dig up as much as you can to find the basic aspects.
- Always deal with a licensed dealer. Yes, licensed dealers do buy and sell rare coins, and you can expect to get a fair and honest deal. This is a great idea when you are unsure of what to buy or need to sell something from your collection.
- Be careful of shady deals. If something seems too good to be true, it probably is. You cannot find a 100-year old coin in mint condition, no matter how well it has been preserved. Check the coin before you believe the claims of the seller.
- Is it collectible? There is no point of buying a coin, if it’s not collectible or won’t appreciate in the long run. Check with the dealer/seller and ask questions related to that aspect.
- Rarity is a subjective concept. Just because a coin is old doesn’t meant it’s rare. Rarity also depends on the number of coins that were minted at that point and time.
Valuation of rare coins is one of the major concerns of investors, because a lot of dealers have been responsible for pushing sales of coins that were not really unique or high, mainly because of economic factors. Take some time to understand if the coin is really worth your time and money. If you are keen on getting US coins, check if the coin was minted prior to 1934, because less than 2% of those coins are in circulation, and that tells a lot about the value. Also, if you are dealing with a new metal dealer, make sure they use calibrated scales.