For many people, coin collecting is just a hobby. But for a few people, their hobby can turn into quite an investment portfolio.
Knowledge and careful planning can provide a pathway to building a world-class coin collection that will appreciate in value over time.
Collectors value coins for their design, rarity, age, or condition and are willing to pay higher premiums for them based on those characteristics. They also enjoy it as a hobby and possess the time needed to dedicate to it. Bullion coins are valued for their metal content and their value is based on that. Of course, it is also possible to do both.
The people that make the most money by investing in coins are coin collectors first and investors second. Just like the stock market, knowledgeable investors make the most money in the long run. True, there been studies done that have monkeys throwing darts at a list of stocks and then compared their return to the market on average. But coin collecting is a lot more complicated than investing in stocks.
Just like any investment, there is risk involved. The investment may go up in value, or it may go down. When the market is going down, you will still be able to enjoy your coin collection while you are waiting for it to go back up. Additionally, make sure that your investment portfolio is balanced and that you do not have an inordinate amount of your assets invested in your coins.
Source: American Bullion