Buying Coins: Investor vs Collector — Video Vignettes
ANA Education Director, Rod Gillis, explains the differences between investing in coins and purchasing coins for a collection.
Hello, this is Rod Gillis, education director at the American Numismatic Association. And I’d like to spend a little bit of time today talking with you about investors and collectors, and the difference between the two so that you can decide which one you want to be.
Let’s start off with investors. You know, there are a lot of people who want to use coins as their way to perhaps strike it rich or perhaps be able to have their retirement funded. And they want to know which coins they should buy and how to proceed.
As a matter of fact, I can remember, not too long ago, I had a woman give me a call and she said that she wanted to take all of the money out of her retirement because she didn’t trust the dollars were going to be worth anything. And she wanted to know exactly what one coin she could buy to be able to fund her retirement. I remember sharing this story with my wife at dinner and she said, I couldn’t believe that I got that phone call. And I said, “Yeah, can you believe that somebody wanted to buy just one coin?” And she said, “No, I can’t believe that anybody would want to talk to you for financial advice.”
But anyway, what’s important to understand is that we at the ANA are not financial advisors. So that is not what we do. So we’re really not able to give you the information that you need. But just a few interesting kind of tips. Number one is that a lot of investors tend to want to buy bullion coins. And what do we mean by that? Well, bullion coins are coins that are generally have more value from their precious metal content than they do for the value that is stated on the coin.
So for example, here in the United States silver eagles are termed bullion coins. They have quite a bit more value for the content of silver that they have in the coin than they do for their dollar denomination. Other examples of bullion coins around the world are Swiss francs, Krugerrands from South Africa, French Roosters, these are all examples of bullion coins and a lot of investors tend to go with those and hold on to them, so that at some point, when they’re ready to fund their retirement, they can liquidate them and there you go.
The one thing that I do want to caution you about being an investor, we get a lot of senior citizens who call us and say that they have gotten phone calls from companies and told them that they really should buy gold right now because there’s a good chance that at one point that the government will make purchasing gold illegal. And I really want to caution you about that. Usually these companies do not have your best interest at heart. There really is no reason for the government to want to confiscate gold, or make it illegal to buy because we are no longer on the gold standard. So there’s no reason for them to want to do that. So if you should get one of those calls, my advice to you is to stay away. Those people are not investors, they’re not professionals, they’re salespeople. And I think it’s really wrong for them to want to scare our senior citizens. So please stay away from that.
Let’s spend a little bit of time talking about collectors. You know, collectors are people who want to assemble a coin collection and with not so much of a care concerning their value. Now I do want to say that the money is important when you’re purchasing coins because if you are able to assemble a collection prudently, then it’s nice that after you have finished with your collection and you wish to liquidate it, that if you assembled a collection carefully, you’ll probably be able to sell it for more than you originally put into it. And there aren’t that many hobbies where we’re able to do that. So that’s a good thing.
However, a lot of people when they begin collecting coins, they want to assemble a mass collection, they want to buy as many coins as they can because there’s always a belief that a bigger collection is better. And I want to caution you against that. When you buy coins, you want to purchase them carefully to make sure that they fit in with your collection, rather than just having a mass. And it’s important for you to understand that when you’re purchasing coins, as a collector, you’re purchasing coins because you like the coin.
Try to steer away from problem coins. You know, if you find a good deal on a coin, but you know that there’s a problem with the coin, anytime that you look at it, your eyes are gonna focus in on that problem. So if there is a big scratch, or there’s a big spot on the coin, even if you’ve got a fairly good deal on it, chances are you’re never going to be happy with it. So as a collector, when you’re purchasing coins you want to purchase the best possible example of the coin that you can. You want the coin to speak to you, you want the coin to be very attractive to you and that’s why you want to buy it.
You know, it’s important to understand, when you are purchasing coins for your collection that you don’t necessarily have to buy uncirculated coins. One of the reasons that I enjoy collecting is that I’m a student of history. And so when I see a coin that I particularly like, generally it has a little bit of wear to it. It’s still an attractive coin, but there’s a little bit of wear. And for me, that’s a good thing. Because I like to think, “Where has that coin traveled? What has that coin bought? Who are the people who have actually held that coin?” You know, it’s a conduit to history, and that’s what I enjoy about it. So you don’t necessarily have to fall into the trap of buying coins that are strictly uncirculated, although you do want to buy coins as problem-free as you can.
So just to recap. As a collector, we want to assemble our collection carefully, we want to purchase coins that speak to us, that are very attractive to us, and we want to be happy with our collection. You know, there are no rules in purchasing the coins. The ones that you like are the ones that you should hold.
This is Rod Gillis, hoping that you enjoy your collection and we’ll talk again soon.