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Numismatics A profitable hobby

Posted by : Siddharth Jalan on | Nov 27,2018

Talk about numismatics, or the hobby of collecting coins, and the image of school going child collecting coins of different countries from his parents or relatives visits to foreign countries comes to mind! But ask a seasoned numismatist who has been collecting and investing in physical currency for decades, and he will tell you with a fair bit of passion that it is an alternative investment like any other collectible like art. So can we call numismatics a profitable hobby? Let’s find out!

Of the rich and famous
Long story short, yes indeed numismatics is profitable. The idea of numismatics as an investment option, though in its nascent stage is breaking ground in India. Till not so very long ago, numismatics was restricted to a handful of investors in India. These were typically well-travelled  high net worth individuals (HNI) who visited well known international auction houses like Baldwin and Spink in London in their pursuit of vintage coins. This was apart from their visits to reputed Indian auction houses like Toddywala in Mumbai to get their hands on precious Indian coins.

Needless to say, huge sums of money was exchanged, in transactions that were largely secretive. Investors in consultation with numismatic advisors, who like portfolio managers track international rates decide on the best bets. The advisor then sent a representative to the venue of the auction( to protect the identity of the HNI investor) and acquired the coin following a successful bid.

Affordable option for salaried individuals
In recent times, however, with markets going into a tizzy ever so often, regular salaried individuals have discovered that numismatics can actually be treated not only as a profitable hobby, but may well be an safe haven that can survive an economic crisis. Further, unlike other collectibles like art, one does not need to necessarily be an HNI investor to begin collecting Indian coins to begin with.

A quick investigation will reveal that the price of  Indian commemorative coin sets that had been issued to mark a special event or as a mark of respect towards an Indian leader, are available under Rs 5000. These coin sets are packaged as uncirculated sets (UNC) or proof sets, the latter being the more expensive variety, because they are of the highest quality with mirror finish.

To purchase these  sets you can simply go to the mint corporation website in India where you will find the links of the four mints in India located in Mumbai, Kolkata, Hyderabad and Noida. You can go to the respective mint website and check out their sellable products that are open for booking. You then need to register as a member, by filling the online questionnaire and purchase a coin set of you choice, like you do with any other e-commerce website. Dispatch time however depends from mint to mint.

A viable investment option
Numismatic advisors expound the theory that physical currency such as old coins and bank notes be used as investment options that can provide diversification to an individual’s portfolio. They can be used as long term investment avenues for potential gains. They also advise that the time is ripe for the Indian middle class or investors with modest resources to consider Indian coins as investment options as the supply is limited and the prices are relatively low.

Experts in the field also opine that as knowledge and information increases about numismatics as an investment option, value of these rare coin sets are bound to increase as they cannot be minted again. There is also the option to participate in auctions where copper, silver and gold Indian coins that were in circulation centuries ago are up for grabs. While opting for such coins however, it is prudent to stick to a particular era or a theme such as Mughal sultanates or British India.

A word of caution
However, they advise that investors should tread with caution as there are many “fakes” floating around manufactured to deceive amateur coin collectors. For beginners thus, it is best to start collecting commemorative sets rather than participating in auctions directly. To learn more about numismatics, experts strongly recommend a deep dive into the subject by reading and joining a numismatics society, before making investments in this category.