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What is numismatics and coin collecting?
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What is numismatics and coin collecting?
A dictionary definition:
Numismatic-Pertaining to money, coins, paper money, tokens and medals.
Numismatics-Is the collecting and study of metal money, paper money, tokens and medals.
Numismatist-A collector of coins, medals, tokens etc.
Coin collecting is probably the most popular area of numismatics.
The collecting of small pieces of metal can lead into a fascinating pursuit that is interesting, informative and fun! Coins today are collected for a variety of reasons including: Their historical significant, artistic merit and monetary value.
An ancient pastime
Throughout the ages numismatists have taken a journey through time in their quest for collectable pieces. Archaeologists have unearthed fascinating coins from long ago, many of which are now in our leading museums.
Over the year’s divers and treasure hunters have discovered hundreds of thousands of Coins, some entombed in sunken vessels, others buried in the ground, what ever their origin, today they survive for a new generation to enjoy.
Imagine Ancient coins passing through the hands of people from history; Emperors, Soldiers, or Slaves. Think of what even the smallest denomination coin was able to purchase long ago. In times of political unrest or economic uncertainty coins were often hoarded in pristine condition in secret locations, waiting to be reclaimed in a better time but perhaps lost or forgotten for centuries...
The coins we hold in our hands today give us the chance to grab hold of a little piece of history.
Every Year new collectors discover the pleasures of coin collecting.
King of collectables
Coins are small
Coins are easy to transport
Coins are convenient to accommodate
Coins come in all price ranges
Coins are in reasonable plentiful supply
Coins have a current market!
Coins have a tremendous advantage over other collectables!
Coin collecting does not have to involve rare or expensive coins to be rewarding. Many beautiful coins of numismatic interest have long been associated with modern U.K coins.
Thinking of coin collecting as an investment?
A Brief history
For many years coin collecting was seen as an exclusive hobby, it is a pastime long associated with royalty. Coin collecting has enjoyed a rich and eventful past. Over the last quarter of a century the coin market has seen values readjust themselves several times...
From the mid nineteen eighties to the mid nineties the UK coin market was in the doldrums. Gone was the confidence and buoyancy of earlier decades, A new breed of investor was increasingly entering the market place forcing up prices. Many true collectors were being driven out. By 1980 prices for some types and varieties of coin had peaked. The market was becoming top heavy and over loaded with high value stock, this was becoming increasingly difficult to sell.
Dealers were reluctant to purchase new stock with a dwindling demand. By 1991 a coin that had been valued at £2000 in 1980 for example, could now be purchased for under £500. Disaster if you needed to sell at that time! The numismatic market was in trouble.
Today, encouragingly, things are better, the market has seen price improvements, In fact year on year for the last four years prices have steadily improved.
In 2007 good prices were consistently being achieved by sellers in auction houses the length and breath of Britain. This current rise in prices has not accelerated into the boom and bust like before, because there are still relatively few new collectors entering the market.
In 2008 the story continues...
Due to the volatility of the last quarter of a century of collecting, financial investors today often over look coin collecting as a form of investing. Numismatics is generally not considered as a new or emerging market to invest in by the general investing public. This is good news for coin collectors.
Numismatists know that like any form of regular saving the accumulative effect of coin collecting over the long term, can in fact be a lot less risky then many other forms of speculative investing. Coins fresh from the mint, taken out of circulation by collectors today, can dramatically increase their face value over the long term. If they prove to become popular with future generations of collectors their value will increase still further.
Choosing coins to invest in
When forming a collection with investment in mind it is important to realise that the value of any individual coin depends on the following three criteria:
· The coins exact design, legend, mintmark (if any) mintage or date.
· The exact state of the preservation of the coin i.e. its condition.
· The demand for it in the market at any given time.
It is useful to view the longer-term picture of influences that can effect this unpredictable and thinly capitalised market.
The success of investing in coins can also depend on the following:
· Supply and demand
· Inflation or expected inflation
· International monetary conditions
Strive for the best
And finally, appreciating that an individual coins popularity is not fixed in history. A popular monarch or series of coins today may be out of vogue next year. We all collect coins in an ever changing market.
Coins that are worth considering are: rarities, quality, and unusual coins. Proof coins/sets are always popular with some collectors and thus always have a market.
The golden rule of coin collecting as a investment is to always strive to obtain the highest-grade example of the coin you are after, pay the most you can possibly afford. It is also wise periodically to review your collection and diversify if possible. This will indirectly have the affect of maximizing the overall appeal of your collection to prospective buyers in the future.
Storing your collection
As coin collecting is a long term pursuit it is important to find a suitable home for your valuable collection. Coins are made of different types of metal and some metals can react adversely to their surroundings. Copper coins for example blacken over time this is a chemical reaction with the atmosphere. Have you noticed how coins stored in plastic envelopes become sticky and difficult to remove? this again is a reaction with the plastic material of the envelope. Silver coins can tarnish or a bloom may appear on the surface over time, in some cases this can become a attractive feature of the coin. The best home for a collection is in a custom made coin cabinet, these are usually constructed of wood which has been tested not to have any adverse reaction with most metals.
Never clean coins
Whatever condition your coins are in it is important to realise that attempting to clean a coin will usually result in a decrease in its value regardless of its original "dirty" condition. Getting out the metal polish will ensure that your collection becomes worthless. Collectors and dealers alike are only interested in a coin in its original untouched condition. Cleaning coins is a risky and skilled operation and normally should never be considered.
An entertaining pastime
One of the nice things I have found with coin collecting and I have been collecting off and on since my Uncle introduced me to the hobby when I was a youngster is it can be restarted at anytime, with the added bonus of increasing in value in your absence! A nice way to earn money with little effort!
Coin collecting and numismatics are both educational and entertaining, a past time both absorbing, and if undertaken wisely a good investment.
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