Use care in discussing rarity

One of many investment factors
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Published : 03/06/14
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The coin business, like most retail businesses in the United States, is generally described as being “unregulated.”

This means that few, if any, federal, state or local regulations relate to the purchase and sale of coins. It also means that, in effect, no barriers block entry to the profession — anyone can put up a shingle (or a website) and start selling coins.

However, certain principles are in effect regarding what is and is not ethical when selling coins, particularly as investments, and a dealer’s application of these principles tells you whether or not the dealer is worthy of your business.

Discussing rarity

In this column I’ll address how dealers discuss a coin’s rarity. 

Rarity seems like a simple enough concept.

All else being equal, scarcer collectible items are worth more than common ones.

But rarity is only one of many factors when looking at collectibles as an investment, the most important being the market’s demand for the item now and at some future date when the investor might want to sell.

Are all “rare” coins valuable? Value depends upon why they’re rare and whether rarity matters for that particular type of coin.

Some items such as “colorized” or private commemorative coins are made in small numbers (often with individual serial numbers from the mint who produces them), but lack a secondary market that would support resale by investors.

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