Investing In Coins In A Bear Market

With the United States and the rest of the world in a recession, the coin market is also being affected by the bear market. But, the question for all of us coin collecting investors is, how should we be investing in coins in a bear market?

CoinLink has a great recap of the FUN coin show that just took place. In this article Legend Numismatics discusses the current state of the coin market. For anyone investing in coins, it is a must read article.

Legend Numismatics states that the coin market is down 10%-20% from its highs in the summer of 2008. As an investor, looking at declines of only 10%-20% actually doesn’t look too bad to me. The stock market and bond market experienced huge sell offs during this period. All and all, the coin market has held its value pretty well. However, as an investor investing in coins, I would like to see a larger correction.

What did you say Fred? You heard me right. I want to see prices really fall on coins.

Bear markets and market corrections can be a great opportunity for investors. And, this also holds true for collectors investing in coins.

No matter what type of investment you are thinking about making, the most important part of making money investing is the price at which you buy. If you buy at a low price, you will probably make money investing in coins. However, it doesn’t matter what coin you buy, if you pay too much for it, you may never experience a gain. This concept holds true whether you are investing in real estate, investing in stocks or investing in coins.

Let’s take a look at investing in stocks. Most people are quite smitten with Apple computers rigth now. On February 25, 2008, AAPL was selling for $125. Between the week of February 25 and May 12, 2008 the Apple stock price went up $58 or 46%. That is great! However, if you bought apple stock on December 24, 2007 instead of February 25, 2008, you would have paid too much for AAPL stock. In December 24, 2007 AAPL stock traded for $199 a share. Therefore, you would have lost money investin in Apple Computers.

Investing in coins is the same as investing in stocks. If you buy at a good price your put yourself in the best position to make money. However, if you buy at too high a price, you might never make your money back.

Investing in coins in a bull market presents some opportunities to buy coins at low prices. If a coin has decreased 20% in the last 6 months, let’s hope that when the coin market improves that same coin can will quickly go up in value that same 20%. This is certainly not a certainty, but if the coin is a high quality coin, investing in coins in a bear market might be a great way for you to make money collecting coins.

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