Ancient coins are gaining popularity as a way to diversify an investment portfolio. Unlike paper investments, such as stocks and bonds, coins (of any kind) have an intrinsic value and are thus much less prone to the ups and downs of the market.
If you're considering investing in ancient coins, you're not alone. Some famous names have dabbled in coin collecting over the years, including President Theodore Roosevelt, newspaper mogul Randolph Hearst, Sigmund Freud and even King Farouk I of Egypt. However, buying and selling ancient coins is a little more complicated than buying a share of a publicly-traded stock. There are several things you'll want to consider before investing in this market.
Things to consider when buying ancient coins
1. Ancient coins are priced differently from bullion. Ancient coins, unlike gold bars, are priced by their rarity, their metal composition and their artistic value. Since this last factor is very subjective, you can see somewhat different prices for similar items among various dealers or auction houses.
2. The ancient coin market is an international one. While modern coins sell best in their home country, ancient coins are desirable to collectors around the world, somewhat like fine art works.
3. Rare coins generally have a lower "melt" value than bullion. The value of the metal in ancient coins is usually less than the same weight in bullion. The value in ancient coins, like fine art, is in the craftsmanship and how desirable the artist's work is to other collectors.
4. Know your dealer. Unlike bullion, where similar items are priced the same at multiple outlets, the price of ancient coins is much more subjective. Working with a trusted dealer is crucial to paying a fair price or receiving one in return.
5. Rare coins are an investment to "hold." While money can sometimes be made by quickly turning around and putting up your ancient coins for sale, this type of investment is better suited to holding for years, if not decades. Investors are likely to be rewarded for their patience. For example, a Roman denarius coin is worth about the same today (in spending value) as it was 2,000 years ago.
Collecting ancient coins combines an enjoyable hobby with investment potential. In addition to adding to your portfolio, investing in ancient coins allows you to learn a little about different cultures and civilizations. However, before you jump into this market, it's wise to learn a little bit about how it works.