Investment Prospects In Stamp And Coin Collecting
Because of the unsatisfactory performance of the stock market today, people are earnestly looking for alternative ways to keep their money safe and see it grow. A good number have become interested in finding out about investment prospects in stamp collecting or philately and coin collecting which is also called numismatics. If you are one of the many who are thinking of putting their savings into collectibles, it would be good to look at the viability of such a step.
Collecting Versus Investing
The first thing you have to decide when you look at investment prospects in stamp and coin collecting is whether or not you want to be a serious investor and not just a collector. When it comes to stamps and coins, there is a whole world of difference between collecting and investing. The collector acquires items for personal pleasure while the investor does this with an eye to making a profit in the not too distant future.
If you have already started a collection and want to look at turning this into an investment, you must realize that a key to turning a profit is selling at the right time. Ask yourself if you have the heart to part with your collection in case the price is right. If you don’t think you have the heart to do this then resign yourself to being a collector rather than an investor.
Basics in Investing
There are many principles to be remembered as you invest in stamp and coin collecting. Some of them can represent a total turnaround in perception for you if you are new to philately or numismatics and have yet to invest in either.
1) Research is a primary tool for investing successfully in stamps or coins. Before you buy anything, look for information on the objects to be purchased. Do your fact finding from legitimate and reliable journals, not from tipsters and websites that are trying to push their own merchandise.
2) Pay attention to market trends and know when to unload. When treated as investments, stamps and coins are subject to the ups and downs of their market. Learn to distinguish between a permanent trend and a temporary, media-driven spike in demand for certain items.
3) Use accepted rating and grading standards and buy only the best. Settling for a piece just because it is affordable is a foolhardy way to invest. Ask yourself if the popularity, quality, rarity and the desirability of the coin or stamp are sufficient to lead to a sustained demand and a higher price after a reasonable amount of time has passed.
Looking at the Two Markets
As far as stamps are concerned, there is a market composed of over two million serious stamp collects, which means they spend an average of 150 dollars per year on the hobby. This is the main body of buyers that you should be targeting as an investor in stamps. Many critiques are not optimistic about the stamp market and have been predicting its collapse for more than twenty years. The best insurance against market decline is to find which items have sustained an upward rise in price over the years. Great stamps, in general, do not sell for lower prices as time goes by.
There are more than seven million serious coin collectors in the United States alone so in a sense, the coin market is bigger than the stamp market. Many critiques say that the coin market is a viable one and coins, especially rare coins, often outperform stocks, commodities and even real estate. However but just as many will say that despite what you sometimes read about rare coins selling for thousands, coins only perform at the level of savings accounts or a Treasury bonds less broker’s fees for buying and selling.
You will get mixed assessments for both the stamp and the coin market but it is still possible to have an alternative to buying stocks or art or real estate with these two commodities. You just have to make sure that you let your head and not your eyes and your heart rule when you invest in stamp and coin collecting.
