Coin collectors are smarter investors than perhaps they realize.
Consider the nature of collecting itself.
A half century ago when I was in my early stages, advice boiled down to two things:
Buy the best you can afford.
There is a lot of wisdom packed into those two short sentences.
Buying the best you can afford does not mean always buying at the top of the pops.
But it does lead to learning to have an eye for quality.
There was no MS-70 for most coins in those days.
The best I could afford as a kid was for the most part what I could pull out of change at face value.
But when I did buy a coin for a set, it was soon to be only Brilliant Uncirculated.
That created a wildly mismatched set.
I knew it was contrary to the exhibit aesthetic.
Nevertheless, it prevented me from spending too much time buying inferior pieces.
This was reinforced by my early purchase of a circulated 1940-D quarter.
I don’t remember the grade, but it was circulated
It came with a nice gouge in the edge that you could not see from either side.
Only after I got it out of the holder did I realize what it was.
That, of course, negated the return policy.
My cost was somewhere around $2 for that coin.
I consider it the best $2 lesson I ever learned.
I never bought another thing from that dealer again.
It was good training.
Collectors make mistakes, but they learn from them.
Following the affordability part of the advice also makes mistakes easy to absorb.
I hadn’t been inspired to pour all my money into some single great purchase.
I was a collector.
I was building a set.
A set by definition meets the important investment principal of diversification.
Some investments can and will go bad.
But no one can know the future.
The point of diversification is to make sure the mistakes don’t sink you.
The 1940-D quarter did not sink my set building of Washington quarters.
I accepted my loss.
I learned my lesson.
I moved on.
Set building by definition is diversification.
The fact I was collecting Washingtons was simply what a collector did.
I could not spend all my time on Lincolns, Jeffersons and Buffaloes.
But my choice to move up the ladder into silver was diversification in action.
Moving into the silver sets proved to be very rewarding when silver soared to $50.
Even that 1940-D quarter ended up being profitable.
Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper "Numismatic News."
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