Rare Gold and Silver Coin Investing

It’s no surprise that advertisements encouraging people to sell their gold and silver have increased in number since the economic downturn of 2008. Dealers in gold, silver and precious metals in general stand to make some real profits by stockpiling precious metal investments while at the same time ensuring their investment value remains intact.

Rare gold and silver coins are no exception when it comes to holding value and building value. Investors looking to find stable, solid investment alternatives may want to consider rare coin investing. With a wide range of selections and prices available, practically anyone can afford to take advantage of the earnings potential found in rare coins investing.

Investing in Rare Coins
Rare gold and silver coins fall within the category of precious metals investments. Precious metals include platinum and palladium as well as gold and silver. Within the marketplace, precious metals trade as commodities or may be purchased in bullion form. Rare coins investing takes place between dealers, wholesalers and individuals who trade and sell within the rare coins market.

Rare coins include pieces from any one of many time periods, some of which include:
• Ancient coins
• Nineteenth century coins
• Twentieth century coins
• Commemorative coins

Rare coins also originate from different countries where currency forms change from time period to time period. Ancient coins in particular typically come from long-gone civilizations, such as Rome and Greece. The history and rarity of ancient coins accounts for their higher price tags when compared to other time periods. In general, a rare coin carries a value that far outweighs its actual worth in gold or silver content.

Coin Values
Within the rare coins market, coins derive their value from one or more of three main characteristics:
• Condition
• Rarity
• Market demand

As with any investment market, the level of demand for an item holds the trump card in terms of what the market will pay for a particular coin. Since the rare coins market functions outside the commodities market, demand for coins from certain time periods may ultimately drive a coin’s price value at any given time depending on current trends.

Rarity almost always fetches a high price value, especially in the case of coins from ancient time periods. According to Financial Web, rarity is based on what’s known as the Sheldon Rarity Scale. In order to qualify as a rare coin, no more than 75 can be in existence. In cases where only 20 or 30 copies of a particular coin exist, the price value increases considerably.

In terms of a coin’s condition, “Condition rarity” also has an influence on price value. This means coins found to be in mint condition generally carry a high price value depending on their age.

Coin Collecting
When considering rare coins investments, the range of time periods and locales to choose from requires a bit of research on the investor’s part. To start out, focusing on one particular era, locale or theme allows investors to develop a growing knowledge along the way. Working with an experienced market dealer can also make it easier to find high value pieces as well as reap hefty payouts when it comes time to sell.

When focusing on rare coins from a particular locale, areas to consider include the Republic of India, the U. S., Great Britain, Greece and coins from ancient civilizations. While actual coin currencies originated somewhere around the seventh century BC, pre-coins and proto-coins were circulated before this time as currency came into being. These differences give investors a range of options to consider before making that first purchase.

Once purchased, rare coins must be handled carefully in order to preserve their value. Handling guidelines include:
• Only handle the edges
• Store in original packaging if possible
• Don’t touch the face or backs of coins
• Never clean coins

As early civilizations existed in different regions across the globe, ancient coins make up a large segment of the rare coins market. Ancient coins from Roman civilizations are some of the most commonly collected, according to Coin Spot’s reference site. Information on different types of Roman coins has been thoroughly catalogued and documented so anyone first starting out may want to consider Roman coins as a first option.
Ancient Roman coins
Greek civilizations existed even earlier than Rome’s with many of their very first coin renditions appearing as far back as 600 BC. Considering the ages of these coins, they’re not as well documented and catalogued as ancient Roman coins. This age difference also means Ancient Greek coins carry higher price tags.

China is another country with a rich background in early civilizations. China’s history may hold the world’s very first minted coin renditions, which pre-date Greek’s ancient pieces. The oldest of these coins appear in different shapes, all of which have a punch hole at their center or near an edge.

Investing in Ancient Coins vs. Modern Coins
One of the most distinguishing factors between ancient and modern coins has to do with how they’re made. As coins became established forms of currency, minting productions were used to make them. Before this time – especially in early civilizations – each coin was hand-made and often unique in detail and appearance.

Identifying or authenticating ancient coins poses more of a challenge than with modern coins. The identification process starts with determining a coin’s time period and region. The next step entails identifying its face value. In some cases, a rare gold or silver coin may have a historical context in terms of why it was made or events that took place during its circulation period. All of these factors can influence its marketplace value.

With modern coins, the available catalogues and documentation on each coin’s time period and rarity rating makes it easier to determine the relative value of any one piece. Investors new to rare coins investing may want to consider these differences when deciding which types of coins to purchase.

Coin Grades
A coin’s grade has to do with its condition when it comes to apparent scratches and flaws. This can affect its overall market value in a big way. Grading, in and of itself is a judgment call so investors may want to gain a basic understanding of how to grade a coin as various dealers may or may not grade a coin correctly.

As the rare coins market has less regulation than say the stock market, “over-valued” coins abound in the marketplace. In effect, over half of the rare coins in existence are over-valued according to Financial Web. This means anyone who purchases an over-valued piece has already lost money on the investment.

The Sheldon Scale offers standardized guidelines for grading rare coins. The scale itself ranges from 1 to 70, so the higher a coin ranks the higher the grade. A high-grade coin will show minimal wear and tear, clear detail and a certain degree of luster and shine.

Investment Benefits
The rare gold and silver coins market offers benefits unlike those found with other investment opportunities, such as real estate and stocks. These benefits derive from the precious metals market in general since metals carry inherent value all on their own.

As countries gradually transitioned from the gold standard to fiat currency models, the inherent value of gold and silver became all the more apparent. Because of these changes, gold and silver can retain their value in spite of falling dollar values.

Since the rare coin market offers a wide range of choices, this makes it an affordable investment option for everyone. Start-up collections can cost as little as $100. The same can be said for pricier single-item purchases. Also of benefit is the limited supply of rare coins on the market. This means existing coins will gain in value as new investors enter the rare coins market.

Earnings Potential
The trick to seeing profit earnings from rare coins investing lies in the passage of time. On average, gold and silver coins appreciate with time so investors will want to approach the market with a long-term perspective. Trends inside the rare coins market can also affect a coin’s earning potential at any given time.

Much like the buying and selling of metal commodities in the stock market, trends in the stock market can also affect rare coin values according to the CoinLink Coin Collecting resource site. So if gold sees a spike in price in the commodities market, gold coins may also rise in price value.

The earnings potential found with rare coins investing is further enhanced by the favorable tax treatment rare coins receive. Investors are only liable for capital gains taxes and only when a piece is sold. This means any appreciation earnings made between the purchase and sale of a coin grow on a tax-free basis.

Monaco Rare Coins
Much like the stock market, rare coins investing requires a certain level of knowledge and know-how in order to spot sound investment opportunities. Anyone considering the rare coins market would do well to research how the market works. It’s also important to have a go-to source that has experience in dealing with market trends and industry standards.

Monaco Rare Coins is an industry leader with decades of experience in the rare gold and silver coins market. Over time, Monaco has established national and international ties with prominent trade organizations, some of which include:
• The Professional Numismatic Guild
• The American Numismatic Association
• The Professional Coin Grading Service
• The Numismatic Guarantee Corporation of America.

With an inventory of investment-grade coins valued at over $10 million, investors gain access to a range of coins from different time periods and regions. At Monaco, curious investors can read up on the company’s history and standing within the rare coins market. This extensive background enables Monaco to offer price ranges that meet most anyone’s budgetary needs and investment goals.