What are the Risks of Investing in Rare Coins?
Liquidity: The marketplace for coins is sometimes troubled by liquidity problems of either the coin or the market. Simply put, a coin is considered to be illiquid if the investor has difficulty finding a buyer, making it impossible to convert it into cash. If the investment market is so “thin” that there are not enough participants to generate either movement in the price of the instrument or ready buyers and sellers, the market is said to be illiquid. In the absence of consumer protection standards, coin dealers are not held to honor the bid/ask prices listed in coin publications, and they are not required to “make a market” in a coin. As a result, a dealer may refuse to purchase a coin from an investor at a quoted price–a high-pressure practice frequently resorted to to get investors to part with their coins for a below-market price. Coins may not be an appropriate investment choice for someone who needs the assurance of being able to secure a fair price for their investment in a sh
