What Would Be A Good Investment In Numismatic Items?

I should open with two caveats: that I myself am not an investor so I do not follow my own advice, and there is an "observer effect" in play: if everyone both knew and followed the "secret path to maximize profits using coins", then that path would immediately stop working for anyone. One of the cornerstones of free market capitalism is that successful people don't share all their secrets.

So, the general advice given to earnest investors hasn't really changed much over the decades.

First step: please reconsider. Coins aren't a "surefire thing" or "guaranteed profits", no matter what some graph-doodling pundit on the Shopping Channel or YouTube or wherever might be trying to tell you. And there are plenty of other investment vehicles out there that offer better returns with less risk. "Investing" in coins is also better termed "speculating", because you are in essence gambling that the price of your stuff will go up while you hold it, and all your profits (or losses) are realised when you sell. Compare this with the so-called "true investments" like blue chip stocks or real estate, which earn you profits (dividends and rental income) while you own it. Coins can't do that. Certainly it would be best to not consider coins to become either your sole or your primary mode of investment.

Second step: look at what has "worked" in the past, and do that. Things that have always fared best in terms of gaining value and being resistant to suddenly losing value, are high-grade, high-demand, low-supply coins. You've probably always heard it said "you should buy the best coins you can afford". For investors, "you should only buy the best". The rare stuff, and the high-grade stuff, is where you need to be at. Yes, it will mean you will need to spend a lot of money on not-very-many coins. But that's where the profits have, historically, been. Go back in time to the 1970s and buy one nice high grade coin for $1000, and buy 1000 cheap common coins for $1 each. Today, I can almost guarantee you that the expensive single coin will be worth tens of thousands of dollars; you'd be lucky to have doubled your money on the bucket of 1000.

Third step: avoid simply "following the crowd". There is of course a contradiction here with the previous point, since the entire previous point can best be summarized as "follow the crowd". But some of the best gains can be made by doing the exact opposite of what everybody else is doing - buying modern commemoratives when everyone else is selling them off, that sort of thing. Exactly how you try to navigate your path between steps 2 and 3 will be up to you. But I suppose the key message here is, again, "diversify". Don't just buy Morgan dollars because everyone says Morgan dollars are hot right now.

Fourth step: wait. Coin investing is a long-term game; quick profits are rare and hard to come by. I had to go back 50 years for my example earlier. While it is possible to make big bucks by taking the buy-low-quick-flip route with newly released coins, it is a bit of a gamble.

Finally, and this one is perhaps the most important: you cannot allow yourself to actually care about your coins. Now, I don't mean in the sense of not looking after them properly, but in the sense of whether or not you actually enjoy owning them as coins. In other words, you cannot become a coin collector. Coin collectors are sentimental about their coins. Take me, for example: I've never sold a single coin (unless I've bought an upgrade) because I'm sentimental about them and I literally don't care about the potential profits I could make by selling some of them right now, and that sort of stuff. But that kind of sentiment is exactly what will stop the investor from maximizing their profits. An investor's got to be ruthlessly apathetic about the coins they own, and at the same time be knowledgeable enough about the coin market to get a feel for the right time to buy and sell. I can't really give advice on how to become like that, since I'm not.

I second that opinion.

Sage advice Sap.