Are Historic Coins a Good Investment?
A coin’s value depends on several factors, but a properly maintained, strong collection can grow in value over time. If you are willing to spend time on research and seeking out the best deals, there are investment opportunities in historic coins.
Benefits of a Historic Coin Collection
A Diverse Investment Portfolio
Markets react in different ways to global events; as one market declines, another typically increases. Investing money in a variety of asset classes offers a layer of protection against market volatility and strengthens a portfolio overall. This is known as ‘diversification’ and purchasing historic coins is one way to diversify an investment portfolio.
Stable Investments
Historic coins are generally viewed as a stable investment, as they do not typically see drastic price movements. The coins are typically insulated from market volatility because of the sheer size of the market. There are millions of coin collectors worldwide searching for new coins.
Liquid Assets
This global appeal also makes historic coin assets liquid. The active nature of the coin-collecting community allows you to sell all or part of your collection at relatively short notice. The number of rare-coin dealers is growing, and assets can be sold all over the world.
Affordable Assets
While the rarest historic coins will require significant investment, you do not need to spend a fortune to create an impressive collection. With thousands of years of history and coins from all over the world, there are plenty of affordable coins that can be added to a portfolio.
What Makes Coins Valuable?
The value of any coin (numismatic value) is predominantly based on three factors: rarity, condition and demand. These three factors combine to dictate the market and determine the value of historic coins across the world.
Coin Rarity
When it comes to collecting, scarcity drives demand. As a general rule, the rarer the coin, the more valuable it becomes. It is also easier to find a buyer for a rarer coin as buyers have fewer options.
Coin Condition
As with most products, the better the condition of the coin, the more it is worth, but it is not simply a case of good used condition. Historic coins are professionally graded to determine their condition and their value. Coin condition should not be confused with a coin’s quality, which describes the finish of a coin. Our guide to coin grading can help you buy with confidence.
Market Demand
High demand drives price increases with any product and historic coins are no different. Certain coins and coin series are more popular among collectors than others, and therefore more valuable. Buying in-demand historic coins should support the aims of maximising returns and liquidating quickly when the time comes.
How to Start Investing in Historic Coins
Hobbyist collectors can begin their collection with the change they find in their pocket, but historic-coin investments demand more diligence. There are several strategies to consider before moving funds into historic coins.
Research is Key
Before purchasing your first coin, do your research. You could build a collection around a particular coin series, country of origin or significant year to maximise buyer interest. To do this, familiarise yourself with the coins of the specific time and place you are interested in. Thorough research will ensure you can seek out the best deals and secure the most significant coins your budget allows. The Royal Mint has a wealth of information to assist you as you begin your journey.
Consider Coin Storage
Historic coins require proper storage to ensure they stay in premium condition. Historic coins should be stored in acid-free paper envelopes and kept in a drawer or cabinet with a velvet base. PVC envelopes are a short-term option, but they are not a permanent solution. Chemicals in the PVC will cause the coins to sweat and damage your collection. If you are storing your coins at home, you should also inform your insurance company as they may not be automatically included in your policy.
Review Tax Obligations
Be careful not to confuse historic coins with bullion coins that are VAT free if you’re not VAT-registered. Historic coins are not considered legal tender and are, therefore, not exempt from VAT charges. Your collection will also attract capital gains tax charges on any net gains from sales. This is currently capped at 28%. Before investing significant amounts in historic coins, we recommend seeking advice from an independent tax advisor to make yourself aware of your tax obligations.
Finding Authentic Coins
Finding reliable coin dealers should not be difficult, as there are many out there. However, coin scams do happen, and we advise any investor to only purchase from reputable dealers to ensure your coins are authentic. The Royal Mint offers an authentication and valuation service that can verify your coin’s authenticity. If you would prefer somewhere independent, the Numismatic Guaranty Company (NGC) is the world’s largest third-party coin-grading service.
What Historic Coins Should You Invest In?
You’ve done your research, found a reliable coin dealer, prepared your storage and are ready to invest, but where do you start? Ultimately, this is something for each collector to decide for themselves, but below is just a selection of interest areas that are popular with collectors and investors.
The Sovereign
The Sovereign is The Royal Mint’s flagship coin and has been struck for kings and queens since 1489. This coin series is renowned worldwide for its reliability and it is extremely popular with collectors. The occasional design changes that mark significant royal events, like coronations and jubilees, are particularly sought after. As the home of The Sovereign, we have all the information you need and the greatest selection of coins to purchase for your collection.
Ancient Coins
Ancient coins from places and times like the Macedonian Empire and Roman Empire are true pieces of history. They are typically rare and coveted by serious collectors with a passion for history. There are options to suit a variety of investment sizes which makes ancient coins a good option for both beginners and seasoned investors.
First and Last Coins
The coins of monarchs are a popular choice for collectors. They trace the history of royalty and provide a tangible link to kings and queens. Typically, the most sought-after coins are the first and last issues of a monarch’s reign. Most reigns produced their own rare coins, and often these are the result of changes in succession.
Ready to Invest in Historic Coins?
This guide should have armed you with the basic knowledge you need to start investing in historic coins, but there is much more to learn. Head over to The Royal Mint’s Collector Services to learn more and discover the rare and valuable coins you can invest in today.
