Coin Collecting – Hobby versus Investment Opportunity


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Many parents encourage their youngsters to collect stamps or coins because they are both educational hobbies teaching them about art and history. Most who start collecting when they are young keep on with the hobby into their adulthood, and many times it becomes something they can gain from monetarily.

Coin Collecting as an Investment Opportunity and a Hobby

It is a sweet combination when a hobby provides not only enjoyment but a way to make investment income as well. That is precisely what often happens with coin collectors.


Just as with other investments, there are risks involved in coin collecting as a money making opportunity. The stock market fluctuations throughout history are proof that even what appear to be the best investments sometimes fail. Collectible coins don’t always provide the return on investment we expect, and some even lose money sometimes, but they are overall still considered one of the safer types of investments.

If you collect coins out of interest more so than for their potential gain in value, you are a coin collecting hobbyist and not an investor. Purchasing inexpensive coins worth maybe a scant more than face value won’t provide much return on investment, and it will also the limit the coins you could buy that stand to have an increase in their worth.

Focused Coin Trading versus Diversified Trading

An investment can be focused or diversified. As an example, one single rare and unusual coin can be worth so much that it’s worth paying a tidy sum for it because it is almost certain to bring a good return when you resell it in a year or two. This is known as a focused investment. An alternative is to purchase several coins that will bring smaller returns, which is diversified investing, but the coin purchases require less up front capital.

Some coin collectors focus primarily on diversified coin investments. Not every investment will bring a profit, but there is a reasonably good chance that many will be profitable sales. Diversified coin investments are usually for coins that are not the most expensive or sought after pieces. If a buyer makes a mistake in a coin purchase, it is often easier to sell it with a minor loss.

Successful coin collectors with many years of experience probably started out with diversified coin investments as they learned more about coin trading. The more experience a trader has in purchasing coins, the better results they have in pursuing the smaller available number of more profitable coins.

Coin collecting is an interesting hobby that brings history to life and provides a way of building a nice collection of rare and unusual currency, not to mention the fact it is an investment in the future.

What makes coin collecting a hobby, an investment, or both is based on the individual collector. A collector with a large supply of coins but not much return on their investment is a hobbyist, while a collector who follows market trends and coin trades is an investor.

Comments

One Response to “Coin Collecting – Hobby versus Investment Opportunity”
  1. sWk says:

    The site http://www.petitioncrown.com is a non commercial site. All the Coins are ART; they are the only source of dating history. A wonderful hobby that was first recorded by the Caesars of Rome and then continued until today it is the preferred hobby of millions.

    Coin collecting is a hobby, investment? Many start by investing, most end up collecting :)

    A hobby is good for the soul, when you see a work of art and you fall in love with the piece you know you are a true collector of the specific item or area of interest

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