Why You Probably Shouldn't Mix Coins and Investing

January 18, 2010

I'll confess that I quite like the idea that I can make money with my coin collection. This could be by buying a top coin, holding onto it for years and then selling at a profit, or perhaps spotting a bargain, snapping it up, and turning it over immediately for a quick profit. However, like so many things, when the potential for profit (or loss) is at hand common sense and logic seems to fly completely out the window. One well known online coin forum has two interesting discussion threads running at the moment. One is about supposedly over-priced Royal Australian Mint collector coins and the other about the sudden surge price in the secondary market of a particular dollar coin.

The opinion of one group of people is that the RAM overprices a certain product and the potential for future investment gains is extremely limited because of the high purchase price. Their solution would be for the RAM to release said product at a much lower price in spite of the fact that the lower price suggested would most likely be well below the actual cost of materials of the product!

Let's have a quick look at the second issue, a NCLT dollar coin with a high mintage and low issue price (around $13 I think). The coin was released a couple of years ago and some recent events have lead to a surge in the price of the coin on the secondary market. This has lead to cries of profiteering and sellers hyping a coin to push the price up.

Now funnily enough the group of people who are upset about the lack of potential investment returns in the first 'over-priced' release from the RAM are THE SAME PEOPLE who are upset about the price rise in of the second much lower release cost coin from the RAM. One can only guess why this is the case, perhaps they bought some of the 'expensive' release that has bombed and didn't get any of the 'low cost' release that has boomed? When dollars get involved in the thought process logic seems to fly out the window!

Now I should state my position here, I own both of these releases, one has bombed and one has boomed and honestly I am happy with both items. They are attractive and I wont be selling either any time soon. But neither is an 'investment', they are part of my collection, I enjoy them, and that's what makes me happy. I'd like to think a lot of coin collectors out there think the same that I do.

Posted by mnemtsas at January 18, 2010 12:28 PM
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