Coins as an investment

"An unidentified coin is a piece of metal,an identified coin is a piece of history". "Coin collecting is the hobby of kings".These are some popular quotes pertaining to coin collection.

Coin collecting has been a popular hobby among people of diverse age groups. However, it is rare to come across people who collect coins seriously. The serious coin collectors are usually are coin lovers and most certainly don't consider the investment aspect of coins. Coins have emerged as a niche asset class to invest in. Investing in coins requires specialized knowledge on the coin and the story behind it. The dynamics of demand supply also is of great help.

When trying to identify coins for investments, it is best to select coins belonging to a specific country, era and ruler. It is always recommended to build a collection based on a specific theme. This is because the amount of coins available is enormous. Hence, selecting a theme and beginning a collection is a first step towards coin investments. The hobby of coin collection is termed as numismatics. Numismatics is broadly, the study and collection of coins. If one is considering investing in coins seriously, it is recommended to invest in coins of high grade. The grade of a coin is the physical condition of the coin. A coin is said to be in un-circulated condition or UNC if there is no wear out and the coin looks as if just taken out of the mint and stored. A UNC coin always commands a premium compared to other grades.

It is also to be noted that it is better to invest in one rare coin rather than investing in thousands of common ones unless you are a dealer. A rare coin is seen to appreciate in value much better than the common ones. However, when making high ticket purchases, it is always best to seek professional help. A longer time frame is essential to realize good returns from coins. It is also to be noted that the coin market may not be liquid enough to sell at cost price within a very short time. The returns for a long term investor have known to outperform other asset classes like Bonds, Equities etc. However, a novice should try to learn about all aspects of coin collection before jumping to investments. Be careful that coin collection is an addictive hobby and you might be hooked.