Avoid These Four Common Mistakes Made by Inexperienced Coin Collectors

Coin Collectors

One of the benefits in meeting with hundreds of individuals a year is that we have the opportunity to evaluate numerous coin collections consisting of all types of coins.  It’s readily apparent which coin collectors are experienced and received sound advice versus those individuals that may have taken the numismatic plunge without first doing their homework.  The purpose of this article is to not only provide new collectors with some guidance as to how to approach coin collecting, including which items to avoid, but to also help sellers of coin collections identify coins that may be potentially valuable versus those coins that are more or less worth the coin’s face value.  In particular, we’ll highlight four specific types of coins and sets that we recommend new coin collectors avoid.

Hand Assembled Sets

Hand assembled coin sets consisting of various themes are usually sold at many times the value of the individual coins and for the most part should be avoided.  They are often packaged in hard acrylic plastic or in handsome display cases accompanied with paperwork; possibly even with a certificate of authenticity.  We typically purchase these coins for the value of the individual coins in the set, break up the sets, and sort the coins by type.  They’re particularly attractive to history lovers, but do your best to avoid the temptation and instead assemble your own set, if a particular theme is of interest to you.

U.S. Mint Rolls

Every year the U.S. Mint produces rolls of coins targeting coin collectors that rarely, if ever, increase in value.  The coins are typically purchased directly from the mint by coin dealers and sold at a nice premium over the face value of the coins.  Granted, some rolls have upside appreciation, such as those consisting of precious metals, but for the most part, modern minted coins consisting of copper, nickel and zinc, rarely, if ever, prove to be worthy investments.  This doesn’t mean that you should give us hope.  Rather, we recommend that you research the number of coins minted to determine if there may be an opportunity for appreciation due to the rarity of the coins.

Coins Advertised on T.V. or in Magazines

Companies spend billions of dollars annually on advertising and the coin industry is no exception.  Professional marketers know how to sell products and are often employed by coin dealers to sell items at a substantial premium.  In our experience, coins that are advertised in magazines, with the exception of coin trade magazines, and coins that are sold on T.V., other than dedicated coin shows, are coins that should be avoided.  Oftentimes, they’re being sold through these channels due to limited local interest or as a result of an overstock situation.  In any event, they’re nearly always sold at a substantial premium over the market value of the coins.  Our suggestion is to jot down any coins that may be of interest and contact your local coin dealer to compare prices.

Privately Minted Sets

Every year hundreds of privately minted sets are produced that vary in quality and value.  It’s always disappointing when we run across collections consisting of numerous privately minted sets that have little to no value.  For our purposes, the difference between privately minted sets and hand assembled sets is that hand assembled sets consist of U.S. minted coins, while privately minted sets are rounds and bars produced by privately owned companies.  In our opinion, the only privately minted sets that you should consider are those consisting of precious metals.  Furthermore, it’s probably best to stick with silver, as these items should appreciate in value along with the silver price, which provides upside potential.  Rounds and bars consisting of other metals should be avoided, unless the items are being purchased solely for collectible reasons without regard for the value or potential appreciation in the items.

Summary

In conclusion, we’ve identified four types of coins and sets that are oftentimes attractive to new coin collectors, but that ultimately have little to no upside potential.  If you’re merely purchasing the coins and sets solely as collectibles, and not for investment purposes, that’s certainly fine, but for the most part, individuals are interested in numismatics for the collectible aspects and the upside potential of the coins.  We recommend that you do your research online or speak with a knowledgeable local coin dealer prior to making your first purchase so that you start off on the right foot and avoid many of the mistakes that new coin collectors experience when first delving into the field of numismatics.

Tony Davis
Tony Davis