2. Over the past 50 years there has been increasing interest and significant developments in
numismatics and the rare coin market, which today make upa multi-billion dollar worldwide
industry.
Coin collecting is by no means a modern day trend, but building a coin portfolio for
investment purposes is vastly different from collecting as a hobby. There’s a lot of important
information you need to know about rare and gold coins before you can begin to diversify
your portfolio with thesealternative assets.
For starters, you should:
1. Know the coin’s market history/cycle: How much has it sold for in the past?What is
its average annual ROI? With rare coin investments, you need to think medium to
long term (3-5 years), but you also need to be realistic about your coin. If it doesn’t
have a good track record in terms of ‘popularity’ or trading, then it’s unlikely to
change in the future. This means you may be stuck with a coin that doesn’t
appreciate in value as much as you’d expect it to.
2. Know what influences a coin’s price and grade: The official grading of a coin is
determined by a number of factors, which also influences a coin’s price. These are:
The metal content that it’s manufactured from
Rarity/scarcity
Preservation (condition)
Supply and demand
Historical significance
Age
Popularity
Availability
Investment potential
Investors
Mintage (when, where, how many?)
Design
Tax benefits
Liquidity/portability
The market value of a coin is based largely on its official grade, which in turn makes
it easier to track the performance. So ideally, you should aim to purchase only
graded coins, or at the very least have your rare coins graded and appraised as soon
as you are able to.
3. 3. Know the story behind the coin you’re buying: A coin with a unique and interesting
history almost always has a higher market value. Is yours from a time period that is
favourable for coin production? Is it from the era of an important leader? Does it
have a very low mintage? Was it minted under exceptional circumstances, or
manufactured with an unusual metal content? These are allfactors which can add
significant value to your rare coin investment.
4. Know about coin grading vs. investment potential: This depends largely on your
budget and what you can comfortably afford, as well as what your investment
requirements and expectations are. Unless you have enough numismatic knowledge
to make your own decision, it’s best to speak to a certified coin dealer who will be
able to advise you on what graded coinsare best suited to your investment profile
and budget. They’ll also be able to advise you on the market performance and
potential of any coins you’re interested in.
5. Stick to the ’50 Year Rule’: Although this is by no means set in stone, it’s an
approach used by many serious collectors and investors. What it means is that you
shouldn’t invest in a rare coin that isn’t at least 50 years old. This is because it won’t
yet have an established track record and it would be difficult to predict future
market performance.
While these tips will go a long way towards helping you make an informed decision about
the type of rare coin you want to invest in, you might still be uncertain about how you’re
going to find the coins you want.
South Cape Coins can help you source the rare coins you’re looking for, and can help you
build a valuable coin portfolio that suits your requirements. Contact South Cape Coins
today for more information.
