Investing in Gold: Use your experts if you are investing in coins
Coin collecting has long been a hobby, but over the last few decades the skyrocketing value of rare coins has attracted a new set of buyers who are looking at coins as an investment. Making investments in coins can be very lucrative and has outperformed many investment sectors in the last decade. Unlike a collector, the investor has a different set of rules for making purchases.
With this in mind a savvy investor should be consulting more than one expert.
Since coins are the main focus of this investment sector, a professional coin dealer is an obvious first choice. A knowledgeable dealer can steer one away from deals that are not what they appear to be. In rising markets there are many sales forces out there that vie for one’s investment dollars. Salesmen are often focused on selling coins that have a higher percentage of profit for themselves and not on what is priced best in the market. Knowing how to steer through these turbulent waters and getting price double checks is a must.
Investing does not stop with finding a dealer. One must also have an accountant or tax adviser in their corner if they are looking to maximize their investment. An accountant can help one through the tax consequences of profit or loss accrued while investing. Keeping records is first and foremost on the investing side. Knowing what the profit, or loss, is can help one formulate a strategy for selling when the time comes. Some items may be taxed differently than others. You may end up paying more taxes if you sell without consulting your accountant first, especially if you are straddling a new tax bracket.
When investing, knowledge of the various rules involved in buying and selling coins or bullion is very helpful. A professional coin dealer can help with a host of these cash and reporting rules, but an accountant will also help in knowing what the tax consequences may be. Using experts in different fields helps streamline the process.
Of course, when it comes to coins, very rarely do we see a person that is strictly a collector, and conversely we rarely see one who is just an investor. Collectors usually do not buy coins without having the thought that one day it will hopefully be worth more. Investors seldom buy coins unless inspired by an aesthetic desire. The blend of emotional and rational thought goes into nearly every coin buying decision.
For most involved in coins, it will be a convergence of hobby and investment. Keeping records of purchases and sales is one of the most important things you can do. It can help to show where your emotional focus is and give your accountant the accurate information needed to comply with tax rules. Make sure you are talking to both you accountant and coin dealer before making large uninformed leaps, both professions can help you to make a sound decision.