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moneymetals

Don’t Get Screwed: Buy Collectible Coins ONLY When They Sell Near Bullion Prices

Gold and silver investors generally get started because they are looking for a safe haven. Unfortunately, many of them call a dealer advertising precious metals on TV. The advertising resonates because it touches on all the best reasons to own physical metal, so they pick up the phone.

Then they get conned.

The salesperson talks them into buying overpriced rare coins, instead of low-cost bullion coins, rounds, or bars.

They began by looking for a conservative investment which will hold up in the face of perpetual inflation and/or a collapse in paper securities markets, a la 2008. What they wind up with is a coin that costs 50% more than it’s worth because the dealer misrepresented how rare and desirable the coin really is.

That is how people make a lousy investment in rare or collectible coins. Here is how somebody can make a good one...

Alert buyers can actually get certain historic coins without paying large premiums. They can add something to their stack which offers two ways to appreciate in value. These coins will gain in price as the metals rise or as collectors take a renewed interest, or both.

Right now, investors can grab graded pre-1933 gold coins on the cheap. By “cheap” we mean within $50 of the price for circulated, non-graded versions of the same coins. Money Metals Exchange often has MS-63 or MS-64 grade coins available on our Product Specials page priced this way.

In a weak coin market like we have today, more investors are selling and premiums are at multi-year lows. Coins with these lower MS grades command very little, if any, additional price. Supply is more than plentiful enough to meet the tepid demand.

However, when the market heats up these coins will quickly evaporate from dealer stocks and premiums will rise.


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