Rare coin collecting can be one of the most satisfying and rewarding hobbies, both personally and financially. When you’re starting out though, there’s a lot of information you need to take in. With this in mind, we answer 6 of your most frequently asked questions regarding rare coins.
There’s no doubt about it, rare coin collecting as an investment requires long-term commitment, patience and at least a beginners understanding of numismatics. More than this though, it’s a hobby that is hugely satisfying and rewarding, both personally and financially (if you’re careful).
When you’re first starting out though, there’s a lot of information to absorb, and this can make it difficult to really get started with your collection. With that in mind, we’ve taken 6 of the most frequently asked questions about rare coins and put them together in this blog post so everyone can find out a little bit more about what makes assembling a rare coin collection so special.
1. What makes a coin ‘rare’?
In order to be regarded as ‘rare’, the coin in question needs to have been readily accepted as an official currency in the country that it was minted in and naturally it must be scarce. By this we mean that the coin has a limited or low mintage and/or very few specimens have been preserved, especially those in good condition.
2. What determines the value of a rare coin?
The value of a rare coin is based on a number of different factors, not only the metal it’s manufactured from. Rarity, preservation (condition), supply and demand, historical significance and a coin’s official grading are all taken into consideration.
3. What are some of the benefits of owning a rare coin?
For starters, they are one of the highest performing investment assets you can own; they are liquid; they don’t attract capital gains tax when sold (unlike gold bullion) and they deliver consistently high annual ROI’s. Moreover, when you own a rare coin, you’re essentially holding onto a very significant piece of history, which also adds to its value.
4. What are the top South African coins to invest in?
Rare South African coins are highly sought after and prized worldwide and there are a number of specimens you might choose to invest in or add to your collection. Currently, the best coins you can buy in terms of rarity and performance are the:
• 1902 Veld Pond
• 1898 Sammy Marks Tickey
• 1874 Course Beard
• 1874 Fine Beard
• ‘99’ Overstamp
All of these coins, as well as many other valuable rare coins, are available to purchase through South Cape Coins.
5. What is the best way for me to sell my rare coins?
It’s important that you know as much as possible about the coin you want to sell, so you are equipped to answer any questions that a prospective buyer might have. Your main options when selling your coins are either through online auction sites such as Bid or Buy, eBay or Amazon. You can also sell them through an official dealer, which is recommended as they can offer expert advice and usually have a large client base. Or you can contract to have them sold through a physical auction.
Before you sell your coin though, you need to know its value, or what coins in a similar condition to yours normally sell for. If your coin has already been graded by the PCGS or NGC then your coin dealer will be able to give you an estimate of its market value or suggested selling price. It’s difficult to give an accurate value of a coin that hasn’t been officially graded, but there are various tools you can use to make a self-assessment. Click on the following link to find out more about the process of evaluating your own coins: http://www.pcgs.com/StartHere/StartHereSubPageOne.html
6. How long should I keep my rare coins before I sell them?
The short answer is, as long as possible, with a minimum of one to three years. Due to the nature of this asset, rare coins become increasingly scarce and gain value with each passing year, which means their value never actually ‘peaks’. With this in mind, the longer you keep your coins, the more you’ll benefit from them financially when you do finally decide to sell them. To give you an idea of how rare coins perform over time, you can view 10 year coin performances here and 20 year coin performances here.