A recent topic on an online discussion board got me thinking about ancient coin collecting and investing. It is a hobby or is it a form of investment?
Collecting Ancient Coins is an Investment
The correct answer to this question is that it is both. Most hobbies involve investment in time and other expenses in return for a payoff in the form of enjoyment. Hobbies are as diverse as reading clubs, playing sport, and even racing cars. As I write this I cannot help but thinking of racing cars as sound of the V8s racing in our city track in the Adelaide Clipsal 500 is permeating through my living room, a distant reminder of the days Adelaide used to host the Formula 1 Grand Prix.
Unlike other hobbies however ancient coins yield both enjoyment and asset value. Every purchase of an ancient coin is an investment in an asset. That asset can someday be sold for some value. Ancient coins are always worth something, never nothing.
In some cases the value of the ancient coins you acquire will appreciate. You may derive a profit one day in the future. This is especially likely to the be the case with coins in higher grades that are currently scarce and already in high demand. Additionally, if you buy coins made of precious metals such as gold, you can be assured that at least your coin will be worth its bullion value.
Ancient Coins - Worth More in the Future?
I share a theory common amongst many many ancient coin collectors and dealers. I believe that ancient coins collectively will appreciate in value in the long term. Ancient coins are finite in number. They were minted hundreds of years ago. The celators who engraved the dies and minters who made them have long left this world. The number of hoards discovered will continue to decline until one day there are no more to uncover. Additionally, laws continue to become stricter on exporting ancient coins from the source meaning it will increasingly become harder for new ancient coins to enter the market.
We are seeing this already in the market for uncleaned coins - coins which are sold into the market in the manner in which they were discovered, covered with dirt and sometimes fully encrusted. Uncleaned coins were once plentiful. Found on all auction sites and in the catalogs of most dealers and online websites (mine included) you could expect to find rare and high grade coins for a modest price. No longer the case, the only uncleaned coins still offered are from reserve stocks, or coins of lower grade that have already passed inspections by many hands before they are offered for sale, guaranteeing that no scarce coins will be found.
Some Parting Advice
My advice to all. Consider the investment value in ancient coins as an extra bonus. Something unique to coin collecting which should give you added confidence in spending money in this rewarding hobby. If one day you decide to sell your collection you will a large part, if not all, of the money you invested back - perhaps with interest!