Coins as an investment

A common reason given for purchasing coins is as an investment. Coin prices can be cyclical, and prices may drop for coins that are not in great long-term demand. In addition to demand, condition and rarity (which can be estimated via mintage figures) are also determinants in pricing. Age of a coin per se is not a significant factor.

Many of the reasons given for investing in coins are similar to those given for investing in stamps or gold. As with most collectibles, a coin collection does not produce income until it is sold, and may even incur costs (e.g. for safe deposit box storage) in the interim.

While collecting for pleasure makes an enjoyable hobby, people entering the field primarily to make a profit are warned to study before buying. Certain companies, some of whom may advertise on television, in newspapers, or in popular magazines, are alleged to make outlandish claims about the present and future values of their wares. After learning the basics of the field it is often possible to make better purchases from reputable dealers.

Coin Collecting Specialties

Coin collectors often begin by saving coins they have received in circulation, but found interesting. These may be the remnants of change from an international trip, or an old coin found in circulation. Over time, if their interests increase, chance will not be sufficient to satisfy the demands for new specimens, and a potentially expensive hobby is born. Some become dedicated generalists, looking for a few examples of everything. If they have enough resources, this can result in an astounding collection, as that of King Farouk of Egypt, who collected everything (and not just coins either). Some are completists, wanting an example of everything within a certain set. For example, Louis Eliasberg was the only collector thus far to assemble a complete set of known coins of the United States.

At the very highest levels of coin collecting, it can become a highly competitive sport. Recently, this has exhibited itself in registry sets, where the most complete set of coins with the highest numerical grades assigned by grading services are published by the grading service. This can lead to astronomical prices as dedicated collectors strive for the very best examples of each date and mint mark combination.

Most collectors determine that they must focus their limited financial resources on a narrower interest. Some focus on coins of a certain nation or historic period, some collect coins from various nations, some settle on error coins or exonumia, such as currency, tokens or military challenge coins.

Every collector collects what interests them, and there are as many ways of collecting as there are collectors. However a few themes are common and are often combined to a goal for a collection.

Coin Collections

While hoarding coins due to their value goes back to the beginning of coinage, coin collection as pieces of art was a later development. Known as the "Hobby of Kings", modern coin collection is generally believed to have begun in the fourteenth century with Petrarch. Notes of Roman emperors having coin collections are also known, but it remains somewhat unclear whether these coins were studied, considered curiosities or possibly were merely hoarded.