Wednesday, April 22, 2009

Starting a Coin Collection

By: Jeff Ambio, ANA, NLG

Coin collecting has grown steadily in popularity since the end of World War II. Periods of particularly substantial growth in the number of collectors in the United States have been noted for the early-to-mid 1960s during the run-up in silver prices, the early 1980s as people began to realize the investment potential of rare coins and the early years of the 21st century thanks to new designs for circulating coins such as Westward Journey Nickels and Statehood Quarters. Over the years the most successful collectors—those that have had the best chance of staying with the hobby and protecting the financial investment that they have made in coins—follow a few basic guidelines handed down by seasoned collectors and professional rare coin experts. These guidelines are free to all who invest the time and interest in learning about the hobby of coin collecting before rushing into their first rare coin acquisitions.

1. Buy the Book before the Coin. There is a wealth of knowledge out there about rare coins and the market in which they trade—certainly much more than was available to collectors in the 1950s and 1960s. Take advantage of this knowledge by investing in a few basic books about coins and coin collecting. What you learn could prevent you from making costly mistakes when buying and selling coins.

2. Find a Reputable Dealer and/or Auctioneer. The firms or individuals that you choose to do business with can seriously impact your commitment to coin collecting. Work with an honest, reputable and knowledgeable dealer or auctioneer and you are likely to remain a happy collector. Get a dishonest individual or firm that sells you problem-ridden or overvalued coins and chances are good that you will soon be moving on to another hobby. Always do thorough research on any dealer or auctioneer to determine their levels of professionalism and integrity. And remember that finding a reputable dealers or auctioneer also has other benefits, such as the knowledge that they can share about coins and coin collecting in general.

3. Start Small. Never rush into making an expensive purchase. For starters, you might not know enough about what you are buying to determine whether that $1,000 coins is really worth $1,000. Second, it would be a shame to spend large amounts of money making initial purchase only to find out within a short while that coin collecting is not really your cup of tea. For these and other reasons, I recommend getting started by collecting coins out of circulation. Lincoln Cents, Westward Journey Nickels and Statehood Quarters are particularly popular for this purpose as they are readily obtainable and cost only face value. If you want more of a challenge, however, you can also consider Kennedy Half Dollars and Presidential Dollars—coins that still worth only face value but will probably require you to make special trips to your bank to obtain examples in quantity. Focusing on coins such as these allows you to dive right into collecting while you amass the knowledge and experience required to move on to more costly acquisitions.
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