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Hobby First, Investment Second

by Richard Giedroyc

There has been some disturbing news recently regarding investing in coins. It appears a company has been hawking coins as an investment on financial television programs. There is nothing wrong or unusual about that; however, this advertiser uses fear of future economic uncertainty to promote purchasing the coins they sell not only as protection but as a good investment. In this particular case, the company is selling bullion rather than collectible coins.

In one recently publicized example, an individual purchased about $3 million in coins from this company, receiving common bullion Canadian silver coins worth half that much in return. Such news should be a warning to us all. This should be a hobby first, then an investment. Not the other way around.

The current state of the market is optimistic, but with a “but.” If your primary interest is in intrinsic value-driven coins, ensure you get a reasonable spread between the spot price of precious metals and what you are paying. The value of coins in bullion and bullion-impacted portions of the market remains weak since the U.S. dollar remains strong on the world market.  The scarce to rare coin market is performing much better. The word of caution is still there since reasonable appreciation remains spotty and almost unpredictable.

It takes some experience and knowledge to be a successful investor in this market. Anyone looking to complete a set of something should remain active. Prices are reasonable by historical standards, but could at any time make a positive move that could price some collectors out of their market. Buy now, enjoy later.

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