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iccoins's Blog

30 Nov 2017

Collectors vs Investors

Coins | iccoins

I have been busy lately and haven't been able to write many articles, but finally, here is another one :)

Many coin collectors collect for pleasure, while others collect for profit. But most fall somewhere in between.

What differentiates a collector from an investor?
A coin collector will collect coins because they enjoy it. Maybe they will coin roll hunt for enjoyment, maybe they will complete their set of Peace Dollars or Buffalo Nickels, but they do it for enjoyment. Most often, collectors will not sell their collection for a long time and will likely never sell it. Once they pass, it will be turned over to the inheritors, who can do what they want with it. An investor, on the other hand, will purchase coins for a profit. Often, their purchases have nothing to do with enjoyment, but with profit. An investor of precious metals would be far more likely to purchase a silver bar at a great deal slightly under spot than to pay a few dollars over spot for a coin with numismatic value, such as a Perth Mint Silver 1 ounce Koala. A coin investor will attempt to find the best deals and will not care what type the coin is. Let's take, for example, two similarly valued coins, the Perth Mint Kookaburra and the Perth Mint Koala. If a certain Kookaburra is a dollar or so cheaper than a similar Koala, the investors would likely choose the Kookaburra. A collector, though, would mostly choose based on what they want more.

Somewhere In Between
Most numismatists fall somewhere in between, where they will buy coins for enjoyment while paying a bit more, but will probably buy a simple silver bar if they can find one for under spot to attempt to sell for profit. Many others, when coin roll hunting, will separate copper pennies from the zinc pennies and sell the copper pennies...for profit. The reason they start, though, is for enjoyment and not for profit.

Precious Metals
Many collectors and investors purchase precious metals. Many collectors also are what is called a "silver stacker," which is one who purchases silver and collects silver for the purpose of profit and investment. The precious metals are silver, which is the cheapest and most common unless you count copper. Gold is far more expensive and less common, but when prices rise, gold can go up several hundred dollars an ounce. Platinum and palladium are the least common and also expensive, but the most popular ones are silver and gold.

Silver
Collectors are most likely to purchase silver coins with some sort of a numismatist value. That can be a coin such as a Walking Liberty Half Dollar, a Mercury Dime, or even a modern silver coin, like an American Eagle or one of the Perth Mint coins, such as a Koala or Kookaburra. Investors may also purchase these, but investors will also purchase silver rounds and silver bars, which have no face value. Silver rounds normally have some sort of design to them, but silver bars are mostly just a block of silver. These are both collected for their metal content and not for numismatics enjoyment.

Gold
Gold is pretty much the same as the silver, coming in coins, rounds, and bars. There are less modern gold coins and most of them are a full ounce, but if you'd like to purchase a gold coin for a more affordable price, you definitely can, with the $2.5 Indian Head gold coins, with less gold content than many others. There are several other gold coins, as well as rounds and bars that you can purchase for a more affordable price, while silver is mostly just an ounce or more.

Comments

Conan Barbarian

Level 5

this is a very great blog with great points describing each side. thanks for sharing

I'm a little bit of both. For example, I happen to like commemoratives. When buying a classic commemorative I go for the best I can afford, or at least shoot for a eye catching MS65. i look for something that will eventually go up, but until then, something i will enjoy having. As for modern commemoratives, the marketplace is full of MS69's so I'm really in it for the fun.

iccoins

Level 4

I think a lot of people are. Most people are going to buy a coin that is a better deal if it's the same type. Thanks for reading and commenting :)

Kepi

Level 6

I think I'm all over the board on this one! I collect for pleasure, I have some high end coins for investment, I silver stack and roll hunt. I guess I just love coins! Great blog...really enjoyed it!

iccoins

Level 4

Cool! I'm pretty much just a collector and I don't have any coins that I bought as an investment. Everything I have is for pleasure only. I like coin roll hunting as well, but recently due to bank-wide changes, my branch is no longer allowed to give me boxes :( I do have a few coins for investment, but only when I happen upon a box of uncirculated coinage from the bank. I mostly keep those, open one roll, pick out the best few, and then keep the rest as a future investment, so when the price rises after some time for uncirculated coins from that year, mint mark, and denomination, I have quite a few rolls of them.

user_9894

Level 4

Thank you for the information, it is very helpful.

iccoins

Level 4

I'm glad you enjoyed my post :)

World_Coin_Nut

Level 5

Thanks for taking the time to write. Very good points.

iccoins

Level 4

Thanks :)

CoinLady

Level 6

Well done! Much to think about. Something for everyone on this site. Thanks.

iccoins

Level 4

Thanks for reading and commenting :) I'm glad you enjoyed!

"SUN"

Level 5

Nicely done. I fall in the collector area. I collect items I know have much value and probably never will. But I like the items.

iccoins

Level 4

Thanks for reading and commenting :) I'm also a collector and I presume most people on here are as well.

Longstrider

Level 6

Very well said. Personally I am mostly a collector but will on occasion buy some silver. I also have a couple of higher end coins that I MAY turn someday. However they were bought for collection reasons. I also feel some of the "bullion" type coins are beautiful to own. Especially some of the Australian coins...I call anything put out by a nation with a stated value a coin. I have yet to sell anything. Luckily I haven't had to. I could be wrong here but I believe most financial advisers, except those selling silver and gold on TV, advise against coins as an investment. Most people don't want to hold the coins long enough, at least 5 years. The metals are not as bad. A quick good deal on spot is a quick good deal. Thanks I very much enjoyed this blog!

iccoins

Level 4

Glad you enjoyed! I agree with you. The coins from the Perth Mint are beautiful. I'm considering starting a set of my favorites, the koalas, and might try to someday have the entire set graded by NGC or PCGS. That's my goal, but I know it will take a while since I'll probably just use the money I get for my birthday or the holidays :)

Mike

Level 7

Very well done. Some will also collect unfortunate today what they can afford. The price of some coins are very expensive. It's a sad reality. I believe this is why many leave the hobby. I have been collecting twenty-four years now and I'm on a budget. Your distinction between buyers and collectors is very well done also. I don't sell but my sons know what to do when I go to that vault in the sky. Great blog enjoyed it. Mike.

iccoins

Level 4

Thanks for the nice comment and thanks for reading :) I really like how you used the phrase "that vault in the sky." :)

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