| Under ordinary circumstances, I probably wouldn't | | | | you need to find the exact buyer for that coin, |
| be devoting much time to the subject of | | | | whereas with the bullion market which is |
| numismatic coins, because it's a very small part of | | | | worldwide and tradeable, you will always have |
| gold collecting. But the main reason that I want to | | | | buyers for your physical gold. |
| broach this subject is because thousands of | | | | Let's look at some of the reasons why |
| people in various parts of the world have bought | | | | numismatic coins may not be your best |
| or inherited collectible coins. | | | | investment. While with gold bullion, you are just |
| This was brought home to bear when I was | | | | paying for the content of the metal and the |
| talking to one of my friends about the | | | | dealer's premium. With numismatic coins you are |
| advantages of buying gold and she told me she | | | | paying not only for the metal and the dealer's |
| had a very large collection of gold coins that go | | | | profit, but on top of that you are also paying a |
| way back into the early 1800's. They have been | | | | numismatic premium, which is for the supposed |
| handed down from generation to generation in her | | | | rarity of the coin. Then you better keep your |
| family - and I said to her, are you going to be | | | | fingers crossed that that coin is really rare and will |
| selling it? And she said - oh no - I'm going to be | | | | keep its value through the years. |
| leaving it for my grandchildren. This was a very | | | | If you have invested in gold bullion and the price |
| interesting concept to me because in the United | | | | rises by 5-10%, you are already close to being in |
| States, gold bullion was confiscated from 1933 to | | | | profit. On the other hand, if you have invested in |
| 1971. These laws had no relevance in her life | | | | numismatic coins, the dealer has already charged |
| because she had no intention of selling her gold. If | | | | you 15-100% on your purchase and the price |
| we wanted to do simple maths, based on what | | | | needs to have gone up by at least 15-100% for |
| was paid for the gold in the early 1800's to what | | | | you just to break even, which may be why, I |
| it's worth today, should she have decided to sell | | | | read a quote that went something like this: |
| the gold now, she would be a millionaire many | | | | In numismatics, lots of money is made selling rare |
| times over. | | | | coins to non-collectors, and whenever a |
| The downside of this is if my friend tried to sell | | | | non-collector buys a collector's items, the future |
| these coins when there is a danger of imminent | | | | loss of his capital is almost certainly guaranteed." |
| economic collapse, and many of these collections | | | | There are many theories on investments. I'm |
| come on the market at the same time, she may | | | | going to take poetic license with one of Warren |
| be unable to sell them. But since she has no | | | | Buffett's theories. He once said in reference to |
| intention of selling them, this doesn't apply to her. | | | | the stock market: "Put all your eggs in one basket |
| On the other hand, there are thousands of | | | | and then watch that basket very carefully." I |
| collectors throughout the world, who have in their | | | | took poetic license and decided that his theory |
| collections coins that are not attached to | | | | works beautifully with the investment of gold. I |
| sentimentality, and those collectors need to be | | | | would recommend putting all my gold in one |
| aware that in a serious economic downturn, when | | | | basket, primarily because I wouldn't have to |
| people have to raise money very quickly, you | | | | watch it on a daily basis as carefully as you would |
| may have hundreds of these collections on the | | | | the stock market. You can see more or less the |
| market at the same time - and at this point, you | | | | gold trends before you actually have to make a |
| might find they are not a very good investment, | | | | decision, whereas with the stock market you |
| as you cannot sell them or you might have to sell | | | | really have to be paying attention each day. I'd |
| them at a huge loss. There is a limited market for | | | | recommend setting up an action plan that you can |
| rare coins....there is a saying that goes something | | | | live with and then stick to it. If your action plan is |
| like this: "The only thing rarer than a rare coin.....is a | | | | to put most of your money into gold, stay with |
| buyer for a rare coin." | | | | that plan. If your action plan is to diversify, then |
| With numismatic coins, you are paying many | | | | research carefully the areas in which you want to |
| times the silver or gold content. You are paying | | | | diversify and then stick to that plan. But whatever |
| for the rarity and for how much someone else | | | | you decide to do, have a clear objective in mind |
| covets that particular coin. So if you want to sell, | | | | and stick with it. |