BUY COINS THE RIGHT WAY AND FOR THE RIGHT REASONS!
by Laura Sperber, President of
Legend Numismatics
I speak to many people on a daily basis who are new to coins. They always
want to know what to buy, what will yield them strong profits down the road.
Unfortunately, most don't understand the right way to buy and just go for the
sizzle. Here is a list of things that I think are the most important to keep in
the back of your mind:
1) NEVER buy for immediate speculation. Rare coins are very long term
proposition. If you compare coin investing to what's happened in the stock
market, then you should NOT be buying! No excuses!
2) Do NOT be afraid to pay premium prices for truly rare and high end coins.
Except for over valued dates, you can NOT buy great and high end coins on the
cheap these days!
3) Avoid generics as your main interest. Unless you are building a type
set, keep in mind, these common coins will only increase in population over the
next several years. If demand doesn't rise, then these coins will NOT show
much increase in value.
4) Know that you are NOT smarter than the dealers or the market. Think
about it, why would a major dealer, who probably has tons of customers
(wholesale and retail) offer YOU (especially a new person) such a great deal
claiming that you could make money on it today-that just does not happen (unless
you start out spending really big)!
5) Know that most internet auctions are traps. The majority of dealers are
fly-by-night people who have no clue as to what is trading on the market at what
levels. Stay with legit dealers who are well known and actually set up at
shows. [Editor's Note: I agree, but my own occasional eBay sales
are not traps -- check out the awesome feedback from my happy clients.]
6) Buy what you like. Is there a series you find interesting? Believe it or not,
there is no magic wand to help you pick a specific series that will out perform
all others.
7) Understand that not all coins are immediately liquid. It is a myth that
you can instantly resell any coin. However overall, coins are a far more
liquid item than other collectables have proven to be. Also be aware that
sometimes the spreads can be as much as 20% between what you paid and what you
could get (assuming a stable market) in as short of a time as a few weeks.
Coin buying/collecting/investing can and does produce winners. Like in
anything money oriented, so long as you understand your limits and don't get
cocky, you'll be fine.
I do not have a real crystal ball to tell you what coins will out perform like
internet stocks. In a Previous HOT TOPICS, I made recommendations based on
my experience and what I personally favor, they are not absolute
guarantees. If I had real psychic abilities, I'd be on a yacht somewhere
in the Hawaiian Islands instead of working here in humid N.J.!
