First off, why buy coins?

In any circumstance, people should try and buy coins as opposed to stocks for safety (unless you have a lot of experience with the stock market). Coins usually have an intrinsic value; the value of coins will not drop severely (always a demand-computer technology, coin collecting, jewelry, etc.) and there are many opportunities for growth. The only severe drop recently was during the economic recession. But, if one were to compare the bank stocks and the drop in metal prices, keeping the metal would have been better (about 40% drop for coins (recovered back) and maybe around 70-80% loss for stocks). Also, stocks can be very stressful, especially if the stocks jump around (OTCBB stocks) or if the stock has continually been dropping. Collecting and investing in coins is a great hobby for all ages and can help children learn the value of investing while having fun looking at different designs of the coins at an early age.

Coin Picks

*Note: Even though you may be a beginner, and do not want to invest a lot, please look at the types of coins you may want to consider buying. There are several coins that may seem appealing, but most of them do not have real value unless they are in superior condition (MS69/70, PF70) (ie. modern mint/proof coins). These types of coins should not be a major portion in a collection, in my opinion.

The following are coins that I would highly recommend. I would not only stick to one type of coin.

1. Silver Rounds- They are fairly cheaper than the American Eagles or Maple Leaves. Maple Leaves and Krugerrands (Australian) are slightly cheaper than the American Eagles. This type of coin should be bought if you are only looking for pure metal value. You would best try and buy these from major metal websites (ie. Kitco). The more you buy, the cheaper the price.

2. American Eagles (certified by NGC or PCGS - MS/PR 69 (DCAM) or MS/PR 70 (DCAM/UCAM))-Before I explain, if you are not sure what the follow abbreviations mean, let me quickly explain. The MS represents Mint State. A coin with no scratches or blemishes should obtain a score of 70, which is the highest. This grade usually commands a high premium (about 3-4 times more expensive than the grade one point lower. MS 69 is a high grade, but there are miniscule scratches, which could severely lower the price. PR (for PCGS) and PF (for NGC) represent proof, which has a mirror like background and a frosty image for any of the parts of the coin that 'stick out' (design). You should buy American Eagles if you are planning a long term investment as they may increase in intrinsic value (in some cases). There are several varieties (reverse proof, proof) and some command a lot more money than others. These can be quite expensive; you may never know what the price of these coins could be in the future. In terms of certification, there are NGC and PCGS. PCGS is more expensive because their standards are a lot higher, but NGC is practically an equally respectible coin grader. ANACS is the other grader that can be trusted. There are several coin graders that can not be trusted, so even though the price of a certified coin may be low do not trust the grade. The three that could really be trusted are NGC, PCGS and ANACS. You should not certify yourself unless you are a major coin deal and can receive a discount from the grader. The prices could be quite high. You should only certify rare coins (Uncirculated Morgans (w/ rare dates), key date coins, and older coins in good condition). Certifying a common wheat date will probly result in a loss of money. So, after the lecture on graders, why buy American Eagle certified coins? These coins will provide a high quality, which implies high intrinsic value. There is a slightly greater chance for these coins to appreciate in value compared to the silver rounds. You could easily buy these on eBay (look below).

3. Gold Eagles- Gold is one of the most rarest metals, but not the rarest. The price of gold could be very volatile, which could be good or bad, but it usually will settle. At this point, I would recommend at least some gold (maybe a 1/10 or 1/4 oz.). Having many metals provide for a diversivied portfolio. Gold Eagles could become very expensive if certified in MS 70 condition. To be safe, you should buy Gold Eagles certified by NGC or PCGS. If you want to buy them uncertified, then you should go to a metal website to be safe. But for certified coins, it sometimes is better to go on eBay. Gold Maple coins are slightly cheaper, but I am pretty sure its intrinsic value is not as high. If you want old U.S. gold coins (Liberty, Indian, St. Gaudens), then you should probably buy them certified. Foreign old coins are usually slightly cheaper than U.S. old gold coins for the most part.

4. 90% Silver- By far the most interesting of all the coins are 90% silver coins (Morgans, Peace, 50c Walkers, Mercury and Roosevelt Dimes, and Barber coins). If you are into collecting older coins, I would recommend buying these coins by the pound or by face value. Searing through these coins is almost like a little treasure hunt. You never know what you may find (unless a listing tells you so). Most of these 'lots' will have coins in circulated condition. I would also recommend buying some BU (Brilliant Uncirculated) Morgans and Peace Dollars as well as some other BU and proof silver coins (pre-1965). They are just quite interesting to look at. Older coins should also be considered for more intrinsic value. If you have a nice Morgan (w/ very few scratches), then it may be good for you to send it to certification. Beware some Chinese replicas. The best place to buy these 90% face value coins are from eBay, from what I know.

5. Any old US coins- This does not include Wheat Pennies (unless key dates, 1955 double die, 1909-S-VDB, 1909-S, etc.). Usually old coins will command high intrinsic value that seems to grow little by little.

If you are interested in any of the coins, you may view them below.

An example of how you may allocate a $2,300 investment potential.

$400 (~20%)- 25 Silver Rounds or 14-16 NGC/PCGS Silver Eagles (MS69) or NGC/PCGS Proof Silver Eagles

$480 (~24%)- 1/2 oz. Gold Eagle

$520 (~26%)- $52.00 FV in 90% silver

$400 (~20%)- BU Morgans and Peace Dollars ( certified (MS63+) and uncertified)

$250-300(~12.5%-15%)- Old Coins (1800s-1900s)- Barber Dimes, Quarters and Halves, Mercury Dimes (BU condition), Walker Halves (BU condition), Key Date Coins, Rolls of BU silver

$100( ~5%)- Proof and modern coins- 1-2 roll of Proof coins, 10 certified proof coins (common ones should be from $7-8) MS 69, maybe one or two MS70 proof coins.

Where to buy these coins:

You could buy these coins on eBay, but for the silver and gold rounds, you may want to consider going to a certified dealer online or even at your local coin store. If you want the BU new dollar rolls, if there is a bank near a federal treasury (ie. FRB of NY) they should have all the newest coins and bills, so check up there before having to pay the hefty premium.