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What Exactly Is An Investment ?

 
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Australia
73 Posts
 Posted 11/29/2022  5:33 pm Show Profile   Bookmark this topic Add crok to your friends list Get a Link to this Message
an investment is simply anything you pursue that you wish to see some usually positive gain from.

is running an investment ? obviously . . .

is a hobby an investment ? your personal pleasure is an investment . . .

collect what you like and enjoy !!!

so how to make your hobby an investment ?

collect what others like also, so over time as you appreciate your stuff it will hold its value better.

buying the best coin is wrong in my opinion as an investment !!!

better to buy three common pieces since each of those separate items have a different chance to increase more over time

if you want that special piece then choose a niche piece, something desirable and hard to get like a rare date or mint mark.

these are some ways to turn you hobby into an investment ; imho...

your comments will help me learn, thank you !!!
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 Posted 11/29/2022  5:57 pm  Show Profile   Bookmark this reply Add T-BOP to your friends list Get a Link to this Reply
You'll have a good chance for future profits if you stick with what many dealers say : Buying the highest grade coins that you can afford .
Tony

For Butch & Jim rest in peace .
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United States
68 Posts
 Posted 11/29/2022  6:09 pm  Show Profile   Bookmark this reply Add Notatzaddik to your friends list Get a Link to this Reply
I think with respect to numismatics, investing is with regard to money.
Of course, one invests their soul in collecting, just as they would by taking music lessons. Very few people play well enough to make any money from it, but there are sure a lot of people enjoying themselves by making music. Of course one can do both, as many have---more power to them. I am in it for kicks, not money. My coin collecting , is like my early cello and accordion lessons, for my gratification only.
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Canada
476 Posts
 Posted 11/29/2022  6:22 pm  Show Profile   Bookmark this reply Add wallyb to your friends list Get a Link to this Reply
If your hobby, whatever it may be, involves collecting something then it is an investment in time, money and thought. Even though people 'collect' for a variety of reasons all collections will have some monetary value. While the collector may not have acquired the collection for financial gain that is most certainly a preferred result. Few people buy collect anything with zero regard to possible increased value, hence it is an investment. IMHO
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Australia
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 Posted 11/29/2022  6:29 pm  Show Profile   Bookmark this reply Add Sap to your friends list Get a Link to this Reply
Technically, in finance, an "investment" is a financial product that provides a return on investment, while the investment is held. Blue chip shares that regularly pay out dividends are investments. Money in an interest-paying deposit or managed fund is an investment. Commercial or residential property that you earn income from tenants from is an investment.

Coins, bullion, physical cash hidden under the bed, cryptocurrency, beanie babies and other collectables are not technically "investments", since you gain zero income from them while you hold them. The only income you can gain from them, is capital gain - from a rise in price between when you bought it and when you sold it. Buying something cheap then selling it later for profit isn't "investing". It's "speculating". Which is a sophisticated upper-class synonym for "gambling", since you have zero guarantee that the price will actually go up, and may well go down.

So, how to speculate in coins? This is the tricky question.

It should perhaps be pointed out that the people who are actually successful at his, are unlikely to be sharing their advice for free to random people on the Internet. So take whatever advice I or others may give you with that grain of salt: we are either inexperienced in this aspect (a category I would happily include myself in, since I never sell coins for profit) or we are deliberately not sharing our trade secrets.

What you want to try to do is to find "sleepers" - coins which are cheap now, but which will rise in price in the short or long term. Bandwagon-jumping onto coins which are already zooming up in price is sub-optimal, since you've already missed out on some of the gains, and you never know if the upwards trajectory will continue.

Spotting a "sleeper" is, however, risky. Some sleepers wake up and roar, some just...stay asleep. And looking back, it's normally impossible to say exactly why specific coins performed as they did. Coin collectors are human, and as such, aren't entirely logical. But there are some general rules.

Things few people collect. A few decades ago, nobody collected Tradesman tokens, and they were relatively cheap. Then interest started to spike, and they're now quite expensive.

Things that appeal to the broader public. Why have these Remembrance Poppy coins surged in price? The theme - remembering fallen soldiers - is something the broader non-collecting public can be interested in.

Things that appeal to coin collectors. I believe one of the reasons why the 2000 Victoria Cross dollar took off the way it did, at a time when few other RAM dollars were taking off, was that the design of a military medal appealed to coin collectors - a medal, on a coin.

Buy the best you can afford. You've rejected this idea in your OP, but there is validity to it. I totally get that some people prefer quantity over quality, and for a collector, that's an OK sentiment. I have it myself - I'd rather buy 50 cheap coins I don't have from a coin dealer's scratchtray, than one flashy expensive coin I don't have from a coin dealer's top shelf, because "buying coins I don't have" is what motivates me as a collector. But you noticed that "sentiment" word I used? A speculator can't afford to be affected by sentiment. A speculator needs to be ruthless, and seize the profits when they happen. Sentiment will make you hesitate, and hesitaters can lose opportunities. And the simple fact is, for "classic" or "vintage" circulation coins when the coin market is rising, higher quality always sees higher returns.
Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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 Posted 11/29/2022  7:34 pm  Show Profile   Check Pacificoin's eBay Listings Bookmark this reply Add Pacificoin to your friends list Get a Link to this Reply
Buy the best !
Common coins are always common!
Valued Member
United States
254 Posts
 Posted 11/29/2022  8:12 pm  Show Profile   Bookmark this reply Add newguy22 to your friends list Get a Link to this Reply
Second Pacificoin

When it comes to investing, I think numismatics fit under the "Greater Fool Theory" category.

If all the grading companies, big auction houses, and larger coin companies came together and advertised the hobby correctly, honestly, and in a matter that really fit and tailored towards the average young, smartphone / social media user, I bet a similar outcome seen with those digital NFT artworks (garbage) could be realized in this hobby. Of course, handling a digital NFT is different from handling a real, physical NFT, and the market/economics behind a "coin NFT market scheme" would have to be slightly different. But still, based on my personal observations of how this hobby is marketed online, numismatics is more so seen as a niche thing to do for "older/informed" people, than something that feels accessible to everyone.

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United States
254 Posts
 Posted 11/29/2022  8:35 pm  Show Profile   Bookmark this reply Add newguy22 to your friends list Get a Link to this Reply
Also just to add on, there are so many parameters in coin collecting that to really get into this hobby, a serious person has to really be well informed. For us, knowing what grading companies exist, how coins are graded based on the 70 point system, what makes a coin only "genuine," denominations, metal content, years, mintage statistics, mint marks, errors, tokens, cataloging, coin categories by types, varieties, rarity by grade/year/type, etc etc is all pretty much second nature to us, but for someone new, that is a TON of information to absorb. When someone new is looking to spend their money on something and gets introduced to coins, having so much information thrown at you only makes a person feel uneducated, inadequate, and plants that fear of "I don't know what I'm doing, I don't feel confident, I'll go spend my money somewhere else because I feel I might make a mistake and spend too much." I've had tons of friends ask me about my collection and how to get into the coin market, but almost all of them get scared off when they realize how much information actually goes into making that decision that a particular coin is the right one.

I guess what I'm really saying is to get coin collecting to a much much broader, general audience, it has to be simplified so people "feel" confident in what they're buying, even if that means feeling confident equals paying a higher premium. Morgan dollars are going for $30+ in some places because its marketing is simple to understand (all American silver), even though many of us know how cheap they were being sold for just a few years ago. This is also probably why people spent so much on the D-Day privy mark silver eagles. It's simple to understand what a silver eagle is (modern manufacturing), and its obvious to see that a "special" stamp makes one more rarer than the other (manufactured rarity).

I'm saying this because all of us here who have huge collections could make serious profits if this hobby was marketed correctly. Old coins that were meant for circulation are true treasures. They have survived time, they represent a people and culture during a specific era, they were highly valued in their day, they are a physical representation of a time and people that no longer exist. They are "treasures" that the average person feels they have the potential to own (not everyone will get to own a Van Gogh, but anyone can possibly own a Seated Liberty dollar). People will spend hundreds or thousands on a digital piece of garbage. Coins are physically real. I don't see how the same concept can someday be applied to numismatics. The same goes for banknotes.

(Just my uneducated, youthful opinion)
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 Posted 11/29/2022  9:00 pm  Show Profile   Check Pacificoin's eBay Listings Bookmark this reply Add Pacificoin to your friends list Get a Link to this Reply
I will throw this out there for discussion.
based on what I have personally experienced
and witnessed. At a recent UK auction I sat next to
a youngish gentleman who worked for a UK investment
firm. Over the course of half an hour he spent close
to a 100,000 pounds on 7 coin lots . I said how long
have you collected coins for .answer , I don't collect at all
these are an alternative investment! ...
Most EXPENSIVE coins (10K+) these days are not going
to collectors but are being purchased BY the well
heeled as an alternative investment.
Thoughts ?
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 Posted 11/29/2022  9:14 pm  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply
Investment and hobby are not easily confused.

An investment is undertaken with the primary goal of financial gain.

A hobby is not.

If the objects of your hobby happen to gain in value, that's good fortune.

My investments sit in one place. My coin collection sits in another, It;s 100% clear to me which is which.

If it's not clear to you, well ...
Edited by tdziemia
11/29/2022 9:17 pm
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 Posted 11/29/2022  9:22 pm  Show Profile   Check Pacificoin's eBay Listings Bookmark this reply Add Pacificoin to your friends list Get a Link to this Reply
Certainly clear to me as well .
That said since 2018 I have made a good living coin dealing .
My stock portfolio ..absolutely kicked!
So maybe as clear as mud .
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United States
724 Posts
 Posted 11/29/2022  11:35 pm  Show Profile   Check CarrsCoins's eBay Listings Bookmark this reply Add CarrsCoins to your friends list Get a Link to this Reply
i make my living selling coins. many of the coins in my coin collection are things I would lose money on if I went to sell them. I happily pay top dollar for things that I want. hobbies arent how you make money. they cost.

sometimes the top coins are stagnant for decades and the culls outpace the stock market. there are no rules and nobody has a crystal ball.
I collect low grade large cents. I currently have >230 Sheldon varieties and >235 middle date Newcomb varieties.
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 Posted 11/30/2022  1:21 pm  Show Profile   Bookmark this reply Add Cdncoins to your friends list Get a Link to this Reply
I think in general to make money "investing" in coins it takes deep pockets and a lot of patience. From what I've seen, paying a lot for high quality rare items and holding them for a decade or more can often but not always provide a good return - at least before transaction costs.

One big issue is that there are significant transaction fees. If I buy a coin from auction (other than eBay and some others), I pay a 20% buyers premium. Then when I want to sell it, I pay a 10% sellers fee to the auction company. I then also have to pay for shipping each way. If you are a dealer, I don't see that as making investments, but rather your career, and you are making income to pay your living expenses.

Whereas I can buy or sell a stock I pay $6.95 flat commission (or some brokers have zero commission). Many of these stocks pay dividends and the companies grow their earnings and dividends over time.
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Canada
476 Posts
 Posted 11/30/2022  6:17 pm  Show Profile   Bookmark this reply Add wallyb to your friends list Get a Link to this Reply
One part of the equation that I'm not reading about here is passion. I believe this is what separates the avid hobbyist/collector from the investor. Most of the folks on this forum have a passion for coins and want to own them, hold them and talk about them. Selling is an after thought. Investors are purely mercenary in motive. Buy low, sell high. Very few coin collectors ever think that way. Rather they buy because a coin speaks to them and sell only because life sometimes gets in the way of the hobby. That's my observation, or Two Cents (pun unintended).
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 Posted 11/30/2022  8:03 pm  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply

Quote:
That said since 2018 I have made a good living coin dealing .
My stock portfolio ..absolutely kicked!


So, if you are a dealer, you are investing in coins, and it is not a hobby. And congrats on your success!

For me, I have enjoyed sinking money into my collection since 2018.
And separately, the stock market has increased 40% since 2018, so I am really pleased with my investments!
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United States
254 Posts
 Posted 11/30/2022  9:46 pm  Show Profile   Bookmark this reply Add newguy22 to your friends list Get a Link to this Reply
Had someone told me 5-7 years ago to buy Chinese coins, I'd look back today thinking that guy knew what he was talking about. Is there any speculation as to what the next big thing will be in the next 5-10 years for numismatics from a world coin point of view? Or are we all teetering on the cusp of an incoming pop?
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