6. Sharp Eye for Coins
Coin collectors usually have a keen eye and good taste. They are qualified in their field and know the smallest details so well that no matter how it is hidden they still can see it. They see the gold coin under the pile of awfully looking crust. They see coins that are one of a kind and that stand out of the crowd. Coin collectors have an inner feel for such coins, and they understand that a coin doesn’t have to be aesthetical initially to cost $150K. There is not a long list of such people, they are born this way. If you are not one of them, don’t panic, find one among dealers who has this excitement and smell for good coins and maintain good relationships with this person. Approximately 5% of all the dealers are like this, and they usually are the most successful, so if you approach one, keep in touch with this dealer.
7. How to Grade
There were people who spent sums with six zeros on rare coins and they didn’t even understand how to grade. They distribute this job to dealers or other third parties. They simply give money. This is not how it works. Coin collecting is investment. People usually think the steps ahead when they make an investment. If I am not sure about the grading of a certain coin – I don’t buy it. It is as simple as that.
For instance, I believe Indian Head half eagles are too difficult to grade. Frankly speaking, I can't grade it at all. What’s next? I don't purchase or put my money there. Contrast situation: I am sure that I am an amazing grader specialized in Liberty Head half eagles. What’s next? I buy a lot of them.
There are few unpretentious rules for grading. First and the most important one: you need to look and research as many coins as you can. It is recommended to visit shows and auctions and closely look at coins. Second, it would be nice to take one of the grading classes provided by the American Numismatic Association at their yearly Summer Seminars. Third, it is better to know your narrower specialization, or to choose one for start, it would be easier for studying. Fourth, try to find out some grading hints from the dealer that you cooperate with. Finally, it is important to keep in mind that no matter how convenient third-party consultations are, it is always better to rely on yourself, that’s why it is important to learn and observe.
8. Thinking in Advance
Coins are an awful short-term investment. Even if you purchase them at a good and profitable "retail" price, you are giving like 10-20% over usual wholesale prices. So, in order for you to resale this coin and get profit, the coin should increase in its value for 10-20% one more time. Back in 80s, in order to use coins as an investment, people needed to wait for like 5 years. It is preferable to keep your coins nowadays for ten years at least in order to make sure they rise in price. The most amazing and wanted collections that now are considered to be a treasure were built over the course of 50 years and more.
9. Less Is More
Imagine that you have a budget to spend on coins of $20K a year. I would advise for you to get few great $4-5K coins than 20 $1K coins that are also fine. The coins of a great quality will become more and more in demand for the next years, and they are harder to find. Therefore, they will be getting more and more expensive. There are two main concepts in coin collecting, you are either generalist or specialist in the way you collect coins. Less coins, but of a higher price, or more coins of a cheaper price – the choice is up to you. There was a dealer who encouraged others to create collections not larger than 20 coins. It was based on the decisions that these coins must be exceptional and rare, consequently more expensive on the long run. I like the minimalist and selectiveness when it comes to coins.
10. Getting All the Best
If you are only starting your coin journey, before making purchases it is very important to study the market, to educate yourself (look at rules 1 and 2). What sense in purchasing 100 items you don’t understand the purpose and value of. It is better to start at slow speed, and take some time like half of the year to learn the market and environment you are going to dive in. As soon as you feel more confident, you are ready to make steps forward.
The steps described above are not that easy to keep up. Lots of people don’t want or just cannot follow this method as it demands considerable sense of order and a massive time spending. For you some of these steps are acceptable and pragmatic, while somebody will consider it useless. Despite of your opinion, these steps will no harm you in any way, so just in case keep them in mind when approaching the world of numismatics.