When planning a coin investment, the first step is to learn about the differences between bullion coins vs. numismatics. Both types of coins offer their own unique characteristics, so it’s important that you have a full understanding of your options before moving forward.
It’s worth noting that some bullion coins are also numismatics. However, for the sake of straightforward simplicity, we’re going to classify them into separate, binary categories. This approach ensures you’re able to identify their distinct attributes clearly.
Understanding the distinctions between bullion vs. numismatic coins will make it easier to choose the best option for your needs. Let’s go over their differences below so you can make an informed decision.
First things first. Here’s a quick overview of both types of coins. From there, we’ll dive deeper into how their differences directly affect your decision as an investor.
Bullion coins are issued by governments of countries worldwide. Like bullion bars, they provide investors with a way to purchase gold, silver, platinum, and palladium for as close to the spot price as possible.
Numismatics are collectible, rare, low-population coins. They may have historical significance, be antiques, have minting errors, or are difficult to find.
When weighing the differences between bullion vs. numismatic coins, you’re really choosing whether you’re interested in purchasing precious metals or collecting rare artifacts.
Both approaches have their benefits, but it’s very important to recognize the stark distinction between the two formats.
As a general rule, if you’re comparing bullion coins vs. numismatics and are not yet familiar with numismatics, you should probably choose standard bullion coins. Numismatics can be fantastic investments, but they do require due diligence from the investor.
Bullion coins, on the other hand, are as straightforward as it gets. As long as you buy from a reputable precious metals dealer, investing is a very simple, low-risk process—choose your preferred coin, and buy it.
Now that you have a basic understanding of both types of coins, it’s time to go deeper. Here are five key factors to keep in mind as you choose a coin that fits your portfolio.
A bullion coin’s value is based solely on the intrinsic value of its precious metals content. For example, if the price of 1 oz of gold is $2,000, a 1 oz gold coin is going to cost a little bit more than $2,000 (due to the standard markup called a premium).
In contrast, a 1 oz gold numismatic coin could be worth millions. While its gold content certainly gives it value, there are other factors at play.
Here’s a thought exercise. When comparing bullion vs. numismatic coins, substitute the numismatic coin for a highly coveted object, such as a one-of-a-kind work of art or an antique musical instrument.
Yes, those objects have inherent worth due to their materials and functions, but their true value comes from scarcity and demand among collectors. Numismatics are the same, while bullion coins have standardized values.
When comparing bullion coins vs. numismatics, you must also consider the coin’s condition and how it can affect its value.
With bullion coins, condition matters, but it’s not nearly as important. One of the most crucial differences between bullion vs. numismatic coins is that numismatic coins are assigned grades that directly determine their worth.
Numismatic coins are graded according to the Sheldon Coin Grading Scale, a universally accepted 70-point assessment scale. A coin with a 70 grade is in perfect, flawless condition.
This grading system is why it’s critical that you put in the effort to research your numismatic investment and protect it carefully. Even a minor blemish such as a tiny scratch can affect the value of your investment.
Are you planning to hold your investment long-term, or are you hoping for a quick flip? You may want to consider your exit strategy when choosing between bullion vs. numismatic coins.
Bullion coins are incredibly easy to sell. You’ll have no problem liquidating them for cash immediately should the need or desire ever arise.
Selling numismatics can be a bit more challenging. While there are plenty of fervent collectors out there, finding a local buyer who’s ready to buy when you’re ready to sell may be tough.
So, if you need to be able to convert your holdings quickly, bullion coins are the better choice. That said, many numismatics appreciate in value significantly over time, so you may be rewarded for your patience.
A major difference between bullion vs. numismatic coins is the risk involved. As you might assume, investing in numismatics comes with more risk because of the various factors that affect their value.
This doesn’t only apply to bullion coins vs. numismatics, either. You’ll want to assess your risk tolerance when choosing between precious metals, too. For example, gold coins are famously stable, while the price of palladium coins will be more volatile.
There’s no right or wrong decision. Some investors are seeking a safe haven hedge against economic downturn, such as inflation or recession. Others enjoy riding the waves of volatility, buying low and selling high as the opportunities present themselves.
When choosing between bullion vs. numismatic coins, you’ll also want to think about storage. With bullion coins, you could bury them in your backyard and they’ll still retain their value. Numismatics must be carefully preserved.
We hope this guide is helpful as you plan your coin acquisition. If you have any questions, our in-house specialists will be happy to provide one-on-one guidance. Contact us today for a free consultation with a friendly expert.
Whether you choose bullion, numismatics, or both, your financial portfolio will greatly benefit from much-needed diversification.
Understanding the differences between bullion vs. numismatic coins is the first step. Now, it’s time to preserve your wealth and secure your financial future.
When it comes to bullion coins vs. numismatics, there’s no wrong choice. Explore our wide selection of competitively priced precious metal and numismatic products now, and place your order with confidence.