Numismatic Coins: Common Beginners Mistakes

Gold prices have received an impetus through 2010 and the first half of 2011, to a large extent due to the increased demand from Asia, especially China. Prices in the numismatic coin market have also remained buoyant, partly due to the psychological boost given by the rising prices of the precious metal. In fact, according to the editor of the annual catalogue Spink Coins of England, Philip Skingley, the gold price gains witnessed in 2010 were almost 15% over the previous years level. He also said that leading dealers agree that the demand for high quality rare coins has increased.

On the other hand, the Whitman Coin & Collectibles Expo was held in Baltimore during June 17-19, 2011, saw unseasonably high demand but low premiums on classic US gold coins. The dealers were pleasantly surprised by the unexpected business volume at this thrice yearly event.

Given how volatile and confusing purchasing numismatic coins can be for the beginner, here are some common mistakes that prior knowledge can help you avoid.

Common Mistakes Made by Beginners of Numismatic Coin Collections

1. Paying too much – Many beginners end up settling for very high prices. However, how much is too much can be a difficult question to answer. Paying a large premium for a high quality rare coin might not be considered too much, while paying too much for a low quality, low demand coin would be a costly mistake. Therefore, before you spend your hard earned money, learn about the true market value of the numismatic coins you are interested in. Many experts recommend checking Greysheet bid or Coin World Trends as excellent guides on coin pricing. However, these guides do not take all factors into consideration and you should not rely only on them to make up your mind. The best way to compare pricing is to conduct online research on what dealers are offering and what people are paying at present.

2. Buying second and third hand coins – Many beginners end up buying numismatic coins from broker/dealers. This is the safest way to buy gold coins, because while you may pay a higher price you are more likely to receive what you purchased. It is also many times more likely to be authentic. If you buy from a private party or on ebay for example you may be purchasing a counterfeit coin. In this case it is important, unless you are an expert, to enlist the services of a reputable broker/dealer.

3. Not seeking the help of an experienced professional – A beginner might think that his research has made him wiser and go ahead and invest thousands of dollars on numismatic coins without any expert guidance. Unless the person is very lucky, he is likely to buy coins that do not fit his or her overall objectives. Buying numismatic coins is not an easy task. Unless you have someone who can help you not only pick the right coin but pay the right price, you are likely to get the wrong coins for you. It takes an expert collector to compete with the wily dealers. The best course of action is to enlist the help of a knowledgeable and reputable dealer.

Armed with knowledge and guidance of an expert, you are in a good place to start your own numismatic coin collection.