Investing in coins - general rules
Nowadays we have some different forms of money. Apart from “plastic money” (credit cards we have the traditional ones: banknotes and coins. Coins and banknotes apart from their payment function can be strongly demanded by collectors. Why is it happen? The answer is quite simple. Coins do have not only their nominal value, but also numismatic one. Depending on the mintage, the additional value for collectors can differ. According to the rule of demand and supply, if the coin has lower mintage, its value should be grater. On the other side, the coins which were minted with higher mintage do have lower collectible value. Of course this is only the general rule. There are many other circumstances that determine the value of the coin. Let’s summarize them.
1. Mintage.
As I mentioned mintage is pretty important indicator for the person thinking of investing in particular coin. Lower the mintage, higher the potential of growth of the coin. It is obvious that coin that was minted in 500 pieces is much more difficult to find than the one with a mintage of 1 mln. That’s why generally it should cost more. Rarity is crucial, when thinking of investing in coin.
2. Country of emission.
It directly determines the demand for a coin. Coins emitted by some exotic republic like Cook Island will be less demanded than for e.g. US. It is directly connected with the number of collectors gathering these coins. Surely there are more coin collectors in US and also around the world that are willing to buy American Coin, than collectors interested in coins from Cook Island. So thinking about mintage we should also take into account the country of emission and think rather about “relative mintage” as mintage 50 000 for US coin could be relatively more rare than 1000 for Tuvalu.
3. Series of coins.
Some coins are emitted only as one independent piece, but the others can make the theme series. Generally series of coins are more demanded than single emissions. The reason is quite simple. Sometimes the first coin in series may not interest you, but some other in series can. Buying second or third may give you the incentive to complete the whole series and to buy also the first one.
4. Topic of series.
Topic of series is also important. Interesting topic will pull more people to complete the set. Flora and fauna from particular country should be generally more likely to be bought also in other countries, than the topic associated only with that country. More universal topic is more demanded.
5. Extras on the coin.
Sometimes collecting coins contain some other materials, for example opals, pearls or other stones. Other can be covered with palladium or can have color overprint. All that special features distinguish the coin from the millions of other ones and may increase the demand for it.
6. Buy when the price is down, sell when it goes up.
This is a general rule which doesn’t have to be explained in my opinion. It works for all the types of investments, not only the coins. Prices are changing across the time. They do not grow all the time. If you find the coin that is undervalued before others do you may achieve a great rate of return from your investment.
These are just the general rules which can help in making the decision, but even fulfilling all that points may not guarantee the successful investment.
Coins theory
Investing in Coins - general rules
Countries of emission
Extras on the coins
Risk diversification
Rate of return vs risk
Emissions of coins
Fairy tales series - Belarus
Belarusian Festivals and Rites
Van Gogh - Niue Island
Australian treasures series
Famous battles - Tuvalu
Black beauties - palladium coins
Links
Current articles
Investing in Coins - general rules
Nowadays we have some different forms of money. Apart from “plastic money”...
read more
Fairy tales series - Belarus
This is one of the most beautiful series of coins I have ever seen. Oxidized silver...
read more
Countries of emission and mintage
Mintage is one of the most important factors, when you think about investing...
read more
