By Anthony Ricigliano - Rare Coins, History, and Investing

By Anthony Ricigliano - News And Advice by Anthony Ricigliano -- The study of coins, also known as numismatics, has its origins going back to the first exchange of the metal discs for the purpose of commerce. While still hotly debated, it’s likely that the first coin was minted circa 600 BC in Lydia, which is now the country of Turkey. Lydia sat between Mesopotamia, where ideas on the creation of “money” first originated, and the Greek colonies in Asia Minor where the first principles of coinage for exchange and trade purposes began.  The Lydian coin was less than half the diameter of a U.S. dime but its minted width was as thick as a pebble. Made with an alloy of gold and silver, known as white gold at the time, the coin weighed about as much as a U.S. quarter. In terms of its value at the time, the coin represented about a month’s worth of expenses. Despite its history and estimates that there are less than 500 in existence, the Lydian coin sells for between $1,000 and $2,000.        Modern numismatics can be defined by its focus on coins that were machine minted, a process which began in the 1600’s during the Renaissance. The population of collectors at the time was largely made up of European royalty, hence the nickname “The Hobby of Kings”. Through the 19th century, the coins were collected as pieces of history, sociology, and archaeology. As increasing numbers of collectors entered the pursuit beginning in the 20th century, competition for prized coins led to price appreciation and the mindset of collecting began morphing toward investing.   Today’s population of numismatists is comprised mostly of coin dealers and investors who focus more on supply and demand, mintage quantities, price appreciation, minting errors, coin quality, and the wear on die casts over progressive mintings. The migration from rare coins as a collection item to an investment vehicle was recently validated by a sale in March 2010 of a 1794 silver dollar for $7.85 million. The sale represents the highest price ever paid for any rare coin, according to experts. High profile sales such as this one typically result in other pricey sales which in turn attracts the attention and money from a growing number of return oriented investors. With a fixed supply and demand which is likely to increase, rare coins could be setting sales price records for quite some time while performing as one of the best investments around.