Are Rare Coins a Good Investment?
Last Updated: 07/25/2014

Written by Steven Bromberg

Professional Numismatist, CEO Canadian Coin & Currency

Most of us who collect coins are inspired by history and beautiful artwork, and are intrigued by the tangible link to an era gone by. We enjoy the feeling of accomplishment as we add a missing piece to a collection, or acquire a truly spectacular piece. But it is human nature to also want our purchases to be a good investment.

While absolute knowledge of the future may be limited to the gods, we do know that history is a good predictor of the future – and this history provides us with compelling guidance as to how to maximize the potential of an investment in collector coins. If historic trends continue into the future, acquiring the right coins is likely to have a return on investment that could well exceed most other investments in a good portfolio.

Knowledgeable coin dealers with a few decades of experience will usually advise collectors to buy “the best coins they can afford”. This doesn’t mean people should spend more than they are comfortable spending, but rather they should consider buying fewer coins of higher quality and rarity, rather than more coins that are more common or lower grade. There are a lot of reasons why this is sound advice.

The market for collector coins is mostly like other consumer markets. Supply and demand largely dictate values. The coins that are the most sought after are usually scarce dates in high grade in a popular series, although coins that are common in low grades can also be extremely rare and highly sought after in superb condition. Most Canadian coins from 1858 to at least the end of the reign of King George VI in 1952 are popular and sought after in the best possible condition. Beautiful designs and exceptional eye appeal will also increase demand and values. Whether you look back at the past decade or the past half century, most good quality collector coins have outperformed most other common types of investments.

Of course, investment is not the only reason to collect. Most of us will balance the desire for our collection to have future value with the reality that having more items that are interesting or beautiful may be more important to us than having a better return some day for our retirement or heirs. Affordable historic coins and new issues from the Royal Canadian Mint may be alluring, even if the mintages are not low enough to expect significant growth. There is no right or wrong way to choose what is best for your collection. The objective is for it to be fun while drawing a balance between enjoyment and investment.

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