Rare Coin Investing: For Fun, Not Profit
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Bob purchased 18 rare gold coins with the promise he could return them at a 20 percent premium within a year if he wasn't satisfied. Later, Bob was told that buyers in Europe would purchase the coins for even more money if they were part of a set. Bob invested a total of $150,000 in 18 rare coins, believing European investors would purchase the set for $480,000. The coins, however, were worth only $1,800. Bob would have been better off throwing his coins in a fountain.
A Penny For Your Thoughts
Fraudulent sellers of rare or bullion coins are hard to identify because they often copy the practices of their legitimate counterparts. It takes a combination of patience and skill to be successful investing in rare or bullion coins. Collectors do their homework for a long period of time before buying even a single coin. It is important to learn all you can about the coins being sold, such as their rarity, market availability and price trends. You also need to know about the dealer who is offering the coins. Because fraudulent sellers often appear to be reputable, it is especially important to check the information you are given and who is giving it to you.
Avoid Being Taken In
- Do not rush into buying "rare" coins.
- Thoroughly investigate the coins and the dealers offering the coins.
- Be wary of dealer promises to buy back the coins at or above the purchase price.
- Get a second opinion about the grade and value of the coins.
- If that opinion differs, make sure you know in advance the dealer's buyback policy.
- Comparison shop, examining both grade and price.
- Be particularly careful about making any purchase from an unsolicited caller.
What You Can Do
To check on an investment offer or salesperson, or to file a complaint, contact your state securities regulator. You can find state regulators at:
- www.nasaa.org (click "Contact your regulator")
- 1-888-OUR-AARP and ask for contact information for the securities regulator for your state
AARP Resources
AARP on Investment Fraud
Check out other articles exposing many investment frauds.
AARP on Financial Planning
Guidance on the basics of investing.
"Scam-proof Your Life"
By this AARP book at Barnes & Noble to learn 377 ways to protect yourself.
AARP Message Boards
We've all seen "hot offers" that are too good to be true. If you have helpful ideas on how to avoid scams–or have learned the hard way–share your smarts with others.
Other Resources
"Investing in Rare Coins"
Federal Trade Commission
Check out all the potential false claims that are made about investing in rare coins.
The AARP Foundation and the Investor Protection Trust (IPT) have teamed up to create The Campaign for Wise and Safe Investing.TM
This national educational and awareness campaign strives to protect Americans against investment fraud which can erode retirement assets.
