JM Bullion is a proud authorized dealer of sovereign mint annual bullion releases, but we also carry a wide array of proof collectible coins and historic American coinage with designs you simply do not find on modern American currency. If you’ve long felt the draw toward collecting coins, you probably feel overwhelmed with where to start and how to proceed once you do. While everyone has to find their own motivation for starting a coin collection, there are mistakes that anyone can make regardless of the focus of their collecting.
In the following paragraphs we walk you through some of the common coin collecting mistakes that beginners often make. From lack of knowledge to all-around inaccurate information, we help you figure out the right steps to take as you begin your numismatic pursuit.
1. Obsession Takes Hold
Have you ever done a Google search for precious metal names? Literally just for the word “gold” or “silver?” If you do, you’d find that the results for the former come back with 700 million options and the latter returns 480 million options. A lot of new coin collectors become obsessed with a certain type of a coin, one particular design, and/or one precious metal type over the other.
However, when there are literally more than 1 billion results for gold and silver combined, not to mention platinum and palladium issues, you can’t possibly know everything about every coin out there. You are going to run into information overload as you try to start your collection, so be careful not to allow your obsession with one design, coin type, or metal type takeover.
The Internet has created an ever-connected precious metals market, and one that is ever-changing over time. The most dangerous part about allowing your obsession to take over is that the human brain makes high-risk decisions when strained. Avoid this by pre-planning your moves, and learn to be more reactive and less proactive.
2. Conducting Minimal Research
Yes, we just told you not to obsess over any particular product or spend your life trying to surf the web for all the answers. However, that shouldn’t be viewed as license to make your decisions willy-nilly. As you start your collection, your numismatic knowledge is probably quite raw, especially if you’re younger. Learning general information on a coin, such as the spot price or popular forms to buy won’t get you very far.
Do some legitimate research on the web through industry-specific blogs such as those maintained by the NGC, PCGS, and sovereign or private mints around the globe. The former two options are the leading certification companies, so their writers know a thing or two about coins. Mints are the ones striking them, obviously, so they also have a deep knowledge of coins. You should become over-obsessed, but don’t make a rash decision either.
3. Buying from TV Coin Dealers
If you flip through the channels of your cable or satellite provider at any time of day, you’re likely to find at least one show on the infomercial sections promising to give you the best possible deal on the rarest coins in the world. The primary problem with these shows comes down to finances. You aren’t going to get the best price for a given product, no matter what that talking head tells you, because that show comes with advertising and marketing costs that are rolled into the price of the coin.
In most cases, you’ll be able to find that same coin or one of a similar grade from an authorized dealer at a fair and reasonable price. The next problem to take into consideration is the condition of those coins. Even when those TV dealers tell you they’re selling NGC or PCGS certified coins, there’s no guarantee those coins are authentically graded and/or in the same condition as they were when they left the NGC or PCGS.
Last but not least, there’s a falsehood in purchasing coins from TV dealers. The best coins for your collection are the ones that you covet personally, but also that are rare. The very fact that these TV coin dealers are constantly on the airwaves hocking coins means that they aren’t all that rare. When coins are mass marketed on TV or in the paper, the supply is far too big for them to have any real value as a rare coin. They may in fact have collectible value (though lower, see our reasons above), but they aren’t as rare as that talking head wants you to think.
4. Buying Certified from Self-Slabbers
Whether you’re looking on eBay or thumbing through the local paper and see ads for rare coins in slabs, never purchase those items if they aren’t from a professional certification service. Numismatists around the world agree that the Numismatic Guaranty Corporation (NGC) and Professional Coin Grading Service (PCGS) are the two top-tier authentication and certification services, followed closely by the second-tier companies of ANACS and the Independent Coin Graders (ICG).
Just because a coin is in a slab, does not mean it is rare and/or in the condition stated on the label. If you want to start your collection off right, do yourself a favor and avoid buying from self-slabbers. If that coin wasn’t encapsulated by the NGC, PCGS, ANACS, or ICG, avoid spending your money on it as it is not likely to be in the promised condition.
5. Listening to Hot Tips
You wouldn’t invest your savings on stocks and bonds just cause your Uncle Joe tells you their the next hot thing in a bull market, would you? Well, unless Uncle Joe is an experienced numismatist or employee of a certification service, you probably shouldn’t take his advice on coins either. There’s no predicting which coins are going to be in demand in a week, much less in a year or a decade.
If the people providing numismatic advice on hot coins to come were that good at predicting the future, they’d be rich already and wouldn’t need to give you that advice. Going back to a previous point, if this person is selling coins on TV, that’s not a trusted source. If you’re looking for guidance, follow the blogs and advice of authorized coin dealers, collectors, and others in the numismatic field.
6. Cleaning Coins
This one should go without saying, but you’d be surprised how many stories you can find online of individuals cleaning an old, collectible coin only to ruin its value in the process. While a 19th or early 20th century coin may look beat up or old, too beat up and old to want to display, that patina is all part of the allure of the coin.
Many first-time collectors have had a coin cleaned, often with a harsh or abrasive solution, to try and bring back some of the original luster and appeal. However, in the eyes of the NGC, PCGS, and others, this just dampens the value of the coin in the long run.
7. Handling Coins Directly
Akin to the point above, you should never handle your coins directly. Human skin has oils that, when in contact with the precious metals of a coin, can cause slight damage at first and inflict greater damage overtime. In addition to wearing gloves, you should avoid one of the pitfalls some new coin collectors make.
Never, remove your coins from the slabs they were sold to you in, especially NGC or PCGS slabs. Those slabs are designed to keep your coins in the condition they were when you received them, guaranteed. If you remove those coins from their slabs to place in a different display case of any kind, you’re merely undoing the value. In fact, they often lose value just from being removed from the slab itself.
8. Know the Difference between Low-Mintage and Rare
Last but not least, just because a coin has a low mintage does not mean it is rare. With the booming interest in precious metals right now, a common detail you’ll find with many collectible coins is the bullet point that says “low mintage” or “extremely low mintage!” However, just because something is low mintage, doesn’t make it rare or valuable.
You could come across a 24-karat gold coin tomorrow with a picture of Yosemite Sam on it, but the question you need to consider is not “how many coins were made” but rather, “does anyone actually want this?” Your coin collection has its inherent value to you, but at some point you are likely to either sell your collection or pass it on to a family member. If neither of those parties are interested in that particular “low mintage” coin, and there’s no demand when selling it, the investment in adding that particular product to your collection was wasted.
This is just a sampling of some of the common mistakes that coin collectors, new and old alike, can sometimes make. There is no one perfect route to follow when collecting coins. At times, common sense will get you by, but when it doubt, do some research and seek the advice/opinion of professional numismatists who know the industry and can better assess a product for you. Happy hunting!
