Thursday, May 28, 2009

Types of coin collectors

Some collectors amass collections purely for fun with no real profit expectation. This may be most common with children just starting into coin collecting.

A common reason given for purchasing coins is as an investment. Coin prices can be cyclical and prices may drop for coins that are not in great long-term demand. In addition to demand, condition and rarity are also determinants in pricing. The age of a coin is not, per se, a factor.
Many of the reasons given for investing in coins are similar to those given for investing in stamps, precious metals or other commodities. As with most collectibles, a coin collection does not produce income until it is sold, and may even incur costs (e.g. for safe deposit box storage) in the interim.
While collecting for pleasure can make an enjoyable hobby, those entering the field primarily to profit should be warned to study before buying. Certain companies, some of whom may advertise on television, in newspapers, or in popular magazines, are alleged to make outlandish claims about the present and future values of their wares. After learning the basics of the field, it is often possible to make better purchases from reputable dealers.

Coin hoarders are similar to investors and collectors in the sense that they accumulate coins. However, they typically do not focus on one specific variety, rather they gather whatever coins they can and hold them. This is most common with coins whose metal value exceeds their spending value.

Commercial Buyers and Speculators
Commercial buyers and speculators purchase coins solely for the value of the metal used in the coin. Often, the coins purchased by this group are melted down or distributed as bullion for commercial purposes. Typically they purchase coins that are composed of rare or precious metals, or coins that have a high purity of a specific metal.

Someone who acquires coins (collection, hoard, investment) from another person. The inheritor does not necessarily know anything about numismatics, they just have the coins.

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