Avoid These Common Coin Collecting Mistakes

Coin collecting is a really fun hobby and it can bring you into contact with interesting people from all over the world. It does, however, require a lot of homework if you’re to make a success of it. If you’re just starting out, then here are the pitfalls you should avoid.

Buying coins from the TV

There are probably some TV coin dealers who are genuine, but you have to consider how much they’re paying for their TV slot and their advertising. They’ll have to factor these costs into their end prices, even if the coin is genuine and is fairly graded. It may be legit, but you’re paying for the studio lights and that dodgy suit as well… Look for a well-established dealer like Golden Eagle Coins as they don’t need to shout above the rooftops.

Slavishly following the latest tips

There’s always going to be people who insist that such and such a coin series will be the Next Big Thing. It’s not that easy to predict the future and these predictions are no more than educated guesses. Look at who’s making these pronouncements; if it’s someone on TV, then you can probably dismiss it. If it’s a dealer you’ve known for a while then it’s worth thinking about.

Buying self-certified and self-slabbed coins

The most trustworthy coin authentication and grading bodies are the Professional Coin Grading Service and the Numismatic Guaranty Corporation, followed by ANACS and Independent Coin Graders. Sadly, though, anyone can buy the machine to encapsulate coins and stick a label on them. Just because a coin says it’s MS-70 doesn’t mean it is, unless it’s been graded by one of the big bodies.

Buying below wholesale lots

If you’re just starting out or you’re establishing a new type of collection then there’s nothing wrong with buying below wholesale. However, you usually can’t see the coins beforehand and they’re almost always the overbought specimens that the dealer wants rid of. You’re not going to make any great finds here.

Buying foreign coins from unknown or small countries

Almost all countries press their own coins, but of course smaller nations need fewer coins than most others. The smaller numbers don’t equate to a big demand and chances are that the coins won’t increase in value over time.

Mistaking a salesman for an advisor

If someone’s mega-enthusiastic and knows all about the Next Big Thing (see above), or just knows that there’s going to be another financial crash and so you should be buying those very coins that they have right there and then, then you’re talking to a salesman rather than an advisor. Salesmen are just that – they’re after your cash. An advisor, on the other hand, is led by you and responds to what you ask or what you’ve been interested in previously.

Forgetting your homework

The most successful coin investors were coin collectors first. They put in the hours with the books and at the shows; they talked to people (and listened) and started off with the intention to build a collection, not to make money. That interest led to knowledge, which led to the ability to make sound judgements when it came to buying.