The number of privately minted commemorative coins that are in the marketplace today is incredible.  Many private mints produce commemorative and collectible items in all shapes and sizes that have varying levels of value.  While privately minted rounds, bars and ingots composed of precious metals have some intrinsic value, many of the items that we frequently see are composed of base metals, such as nickel and copper, and have very little value.  If the primary reason for purchasing an item is because it has special significance to you, such as a 9/11 commemorative coin, that’s perfectly fine, but think twice if your intent is to purchase the item as an investment, as more times than not, it doesn’t appreciate as expected.

The amount of money that coin companies spend on advertising, especially in magazines and circulars, is amazing.  Many hire professional advertising agencies that know which buttons to push to get you to act on a promotion.  While we’re all influenced by advertising to some degree or another, we’ve found in many cases that coin advertisements and promotions that are run in non-coin related publications are less than ideal.  Many times the items were produced by private mints or were produced by relatively unknown government mints, but are packaged in a way that makes them more attractive.  Most coin advertisements in numismatic publications are for quality items, but think twice before pulling the trigger on an advertisement in the National Inquirer.

TV has become a medium for selling coins in recent years.  While some shows dedicated exclusively to coins, such as Coin Vault, tend to sell quality numismatic items at reasonable prices, the type of coins and commemorative items sold by generic TV home shopping programs tend to be less than stellar.  We‘ve found that many of the offerings are of items that contain very little to no intrinsic value.  For those items that do, the prices at which the items are being offered are oftentimes substantially higher than what you should expect to pay.  While not all of the items offered by these shows are subpar, you certainly have to do your research and due diligence to ensure that you’re picking up quality items at reasonable prices.

As we all know, the rarity or number of an item produced is one of the key factors in determining the value of a coin or bullion.  We’re all attracted to rare and unique items, which in general is good, as it helps to maintain a healthy market for rare coins.  However, just because an item has been produced in limited numbers doesn’t mean that it will maintain its value and/or increase in value in the future.  Over the years, we’ve seen many limited edition foreign commemorative coins from obscure countries that most people couldn’t point out on a map.  If you’ve never heard of the country, or just have a vague idea of where it may be located, chances are that many prospective future buyers will be in the same boat.  In other words, you may have a limited market in which to sell the item when the time comes. 

One of the mistakes that the U.S. Mint made in years past was the over production of nickel-copper proof and mint sets in the 1970’s, 1980’s and 1990’s, many of which are currently selling at steep discounts from the original issue price. Unfortunately, many individuals will likely never recoup their initial investment in the items.  Fortunately, the U.S. Mint has learned from their past mistakes and has lowered the production level of many modern issued sets, which has helped to maintain and even result in a price appreciation for some of these sets.  Before considering an investment of modern issued commemorative coins or sets, whether they be from the U.S. Mint or otherwise, we recommend that you do your research to verify the number of coins or sets produced to determine if you’re making a wise investment decision.  Please note that our comments don’t apply to modern issued gold and silver bullion coins, such as gold and silver eagles.

We’re all attracted to visually appealing and colorful items, but unfortunately coins and currency that have been colorized or painted are typically worth less than the item as it was originally produced.  For example, we frequently see colorized Morgan and Peace dollars and American silver eagles.  Morgan and Peace dollars that have been painted are typically sold by coin dealers as “cull coins.”  In other words, they’re sold at similar rates to silver dollars that have substantial wear or damage.  While the discrepancy between colorized and non-colorized American silver eagles isn’t as substantial, you can expect to receive a lower value for your colorized silver eagles.  The gap widens a bit with lower mintage or key date American silver eagles, such as those produced in 1986, 1994, 1995 and 1996, which can sell at substantially higher rates than common date silver eagles.

In summary, we’ve highlighted seven ways to avoid losing money in the rare coin market.   While privately minted commemorative coins may be aesthetically pleasing and commemorate an important person or moment, don’t expect these coins to appreciate much in value.  Additionally, while coin offerings from non-industry related publications and TV programming may be appealing, most of these items are overpriced and rarely maintain their value.  Another general rule of thumb is to avoid limited edition foreign collectibles, especially those from obscure countries, as these items may be difficult to sell when the time comes.  When it comes to purchasing clad or nickel-copper coin sets, look for those with relatively low production levels, as high mintage items tend to have little staying power.  We also recommend avoiding colorized coins and currency as well as checking the spot price of gold, silver or platinum prior to making a purchase.  Following the above guidelines should help you to avoid many of the pitfalls that we commonly see and put you on the right path toward assembling an impressive and valuable rare coin collection.