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The rare coin world record price of $10,016,875 paid for a 1794-dated U.S. silver dollar in a recent auction is an indication of the strength of the market for high-quality, rare coins; however, investors must be aware of "bogus bargains" and unscrupulous "boiler room" dealers, cautions the Professional Numismatists Guild (www.PNGdealers.com).
"Just because a coin is 'old' doesn't mean it's rare or even valuable. There are some United States coins less than a century old that are worth millions of dollars, and others that are two centuries old that can easily be purchased for less than $100 each," said PNG President Jeffrey F. Bernberg.
The PNG is a non-profit organization composed of many of the country's top rare coin and paper money dealers. The organization's motto is "Knowledge, Integrity, Responsibility," and PNG members must adhere to a strict code of ethics in the buying and selling of numismatic merchandise.
"The biggest and costliest trap many new investors get caught in is the bargain price or the 'something for nothing' offer. When purchasing coins -- or anything else for that matter -- for investment, be aware that there is no Santa Claus. No dealer gives something away substantially under its true market value. If you are offered merchandise priced 'under the market,' it's probably safe to assume that the goods are over-graded, overpriced or misrepresented in some way," cautioned Bernberg.
"There's an old expression in the numismatic market that remains true today: 'If you don't know rare coins, you'd better know your rare coin dealer.' Select a reputable dealer."
PNG officials emphasize there is no substitute for knowledge. As with stocks, bonds, fine art or real estates, the numismatic market is a highly specialized field. In the past, the greatest financial gain has accrued to those who have taken the time to read about coins and learn the basics before making a large investment.
Bernberg says there is a two-tiered market now in rare coins.
"The Mona Lisas and Gauguins of numismatics are just exploding in price as records are being broken virtually every time they come up for sale at auction. The 1794 dollar is in this category, and what seemed like stratospheric prices just a couple of years ago are falling by the wayside," stated Bernberg.
"At the same time, the more ordinary and common coins, the so-called 'generics,' are going at prices that are downright cheap even in top quality. It seems a great many collectors are more worried about their jobs, paying the mortgages, and staying on top of their bills. The more 'ordinary' rare coins are selling at a good pace but at reasonable prices. It seems to be a great time for the more average collector to be adding to his holdings."
A complete list of PNG member-dealers can be found online at www.PNGdealers.com.
For a copy of the informative pamphlet, "Important Things to Know Before You Buy Rare Coins or Currency" or a printed directory of PNG member-dealers, send $1 to cover postage costs to: Robert Brueggeman, PNG Executive Director, 28441 Rancho California Rd., Suite 106, Temecula, CA 92590.
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