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  A Companion to Rare Coin Collecting 
By Ray Wyman, Jr. 

Are Rare Coins For You? 

As with other investments, there are many anecdotes about individuals earning enormous wealth from collecting coins. Yet, even the more believable stories are about people who spent twenty years or more patiently learning and developing their numismatic skills. Unlike stocks or real estate, collecting rare coins requires a deeper commitment to learning and dilligence to augment personal knowledge. For successful collectors, there is an emotional attachment to the art not found in traditional avenues for personal finance. In short, as a serious long-term investment strategy, collecting coins is not ideal for everyone. 

There are three important prerequisites one should consider before engaging any investment strategy. The first is: Do I have long-term funds that can be committed for a number of years? The second: Do I have the ability to meet ordinary living expenses with other resources. The third: Am I confident of my knowledge of my target investment? 

Having the long-term funds to commit to your investment is particularly important when you consider the nature of rare coins. As with other investments, rare coins require a minimum period of "holding" and, to reap the best investment earnings, timing is essential. Rare coins have demonstrated a pattern of growth spanning many years and, for those "hold" their investments over extended periods, profits are the rule rather than the exception. However, for those expect an immediate profit, the results are often disappointing. Keep in mind that some coins might suffer from overexposure and investors who purchase at the peak of a particular cycle may experience substantial losses if they sell into a softer market.  

Meeting your ordinary living expenses is paramount over any investment activity. Never expose yourself to possible losses that could jeopardize your standard of living. Since rare coin investing is a non-income producing asset, it should never be viewed as a "savings account" to dip into as the need arises. While certainly capable of providing strong capital gains, rare coins serve mainly as an excellent vehicle for capital preservation, as well as a hedge against inflation and other forces which erode the value of more traditional paper assets. 

Knowledge can mean everything. At least where investing is concerned, knowledge can be your best asset. Being able to "see" a good deal is probably just as important as "smelling" a bad one. Unfortunately, there are always those individual who are eager to feed on the naive and gullible. Nearly all of the horror stories surrounding bad rare coin investments concern people who knew absolutely nothing about what they were buying. Save yourself the grief and learn the basics before you buy. 

This text discusses some of the many books, magazines and newsletters that are available on the subject. Reading them will help sharpen your ability to "see" and "smell" the opportunities you may find.

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Are Rare Coins for You? 

What is a "Rare Coin"? 

Grading Services 

The Market 

How to Buy Rare Coins 

Holding Coins 

Selling Coins 

Concluding Thoughts 

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Ray Wyman, Jr.  

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Copyright ©1997 

User has permission to print this document for personal use, but may not republish it on the web, in a magazine, newsletter, or newspaper or any other publication or hyperlink to it without the expressed and written permission from the author.