Are Collectible Coins You Buy on TV a Good Investment?

Precious Metals InvestingRecycle and Refine GoldRecycle Precious Metals
Written By Barry Lenson

“Over the last few years, my mother has spent about $500.00 to buy collectible coins she has seen advertised on television. They weren’t made by the U.S. Mint and seem to be base metal coins covered with an ultra-thin layer of gold or gold-toned metal. She is sure they are going to appreciate in value because they were advertised as rare. Should I tell her that she has made a bad investment or just wait for her to find out when she tries to sell them?”

-        James, from Columbus, Ohio

Dear James . . .

We cannot advise you about what you should tell your mother. If she has her “collectible” coins in a display cabinet or tucked away for safekeeping and enjoys having them, then there is probably no need for you to upset her by pointing out that she made a bad investment.

But for the rest of our blog readers, we would like to explain why the kind of coins that James is describing are not a good investment.

Not All “Mints” Are the U.S. Mint!

Any business can set up an operation to produce coins and call itself a “mint.” But that doesn’t mean that if you buy coins from them, you are dealing with the U.S. Mint, which is the government department that issues genuine currency that can be circulated. The quality of the coins made by these private mints is not necessarily bad – but the quality of the coins they make is not the point. Please continue reading.

Many Manufactured “Collectible” Coins Contain Very Little Gold or Silver

Some advertisers like to pitch the idea that the coins they sell are plated with “genuine 18K gold,” or with gold of another karat rating. Claims like that might convince people who do not know their way around precious metals to dial those toll-free numbers and buy, but how much gold do those plated coins really contain? Very little. They might look shiny, but there is really no point investing in them.

“Rare Uncirculated” Coins from the U.S. Mint Might Be Worth a Little Bit More

You have probably seen commercials and ads for them. The pitch is that you have the chance to buy a “rare, uncirculated” coin – perhaps a silver dollar. If you are tempted to buy this kind of coin, remember that the seller is only trying to sell you something for a price that is higher than what that coin is really worth. (Otherwise, why would they be selling it?)

Sometimes sellers will bundle together a batch of coins and sell them as an “uncirculated” set of coins and say that these sets were issued by the U.S. Mint. Remember that even if a batch of coins of different values were issued by the U.S. Mint in the same year, they are not necessarily a “set” that the U.S. Mint created. They are probably a batch of coins that a company that sells collectibles bundled together and sells as batches – it’s a way to get, say, $100.00 for a handful of coins that are worth much less than that.

Defend yourself. Before you spend money on any genuine coins from the U.S. Mint, call a rare coin dealer in your area or look online to see what that coin is really worth. In nearly all cases, dealers who sell these “sets” are only trying to increase the prices of what they have to sell.

How about “Genuine” Coins that the U.S. Mint Did Not Make?

You have probably seen advertisements for them too. They could be coins that were manufactured to look like genuine quarters, half dollars or silver dollar coins, or something else. You will also notice that the word “copy” is stamped on them somewhere, indicating that they are not genuine U.S. currency. (It is illegal to sell copies of U.S. coins that are not stamped in this way.)

How about Other Commemorative Coins?

You have probably seen ads for these too. They could be “collectible” coins made by companies to honor Abraham Lincoln, JFK, the World Trade Center, or anything or anyone else. Remember, as we pointed out earlier in today’s post, that not all mints are the U.S. Mint! Most, if not all, of the commemorative coins these private companies make, have very low value. So when it comes to investing, skip them.

This leads us to a similar kind of “collectible” coin – the replated or modified genuine coin. You have seen ads for these too. They are made when a private company buys up a batch of genuine coins from the U.S. Mint and thinly replates them, or partially replates them, with gold or silver, and then sells them as collectible coins. This is another form of the collectible coin to avoid.

What Precious Metal Investment Will Make You Much More Money?

In our experience and opinion, coins are never the best investment you can make in precious metals!

Even if you buy a genuine gold coin that was made for investment purposes, its value will always be tied to current trading prices. So if gold prices rise, your investment will rise in value – and vice versa.

Gold scrap, silver scrap, and platinum scrap are the investments that provide investors with the highest return for every dollar they invest. Alert buyers can buy scrap for pennies on the dollar, have us extract the precious metal it contains, and pay the full value of those metals at current trading prices.

Want to know more? Call our advisors at 800-426-2344.

And if you have a relative who is interested in making money by buying things that have more real value than coins that are sold on infomercials, perhaps it is a good idea to show them today’s post. We hope they will see the light and begin to invest in more solid forms of gold, silver, and platinum.

Barry Lenson
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