The rare collectible coin markets bottom-line is one of the best of all investments. In the previous sections I explained how external conditions affect the coin investing market, and how much you can expect to make investing in coins. Here are five more important advantages of rare collectible coin investments:

1. Liquidity
Rare coins are the most liquid of all collectibles. Since 1963, the Coin Dealer Newsletter has published weekly dealer-to-dealer pricing information for all of the important U.S. coins. No other collectible has a pricing structure published as frequently and accurately as rare coins. And, two or three times a month, there are major coin shows and/or auctions where you can sell your coins. What can you expect from the rare coin market in terms of liquidity? When the time comes to sell your coins, you can expect and receive immediate payment. 

2. Diminishing Supply
This is a subtle yet very important coin investment advantage. The supply of rare coins is diminishing daily. Not only are they not making any more $20 Saint-Gaudens, Buffalo nickels, Walking Liberty halves, Morgan silver dollars, etc., but also the available supply is constantly diminishing due to meltings, abuse, neglect, etc. This is a sharp contrast to other investments. In the stock market, when they need more shares, they issue them. 
The advantage of the rare coin market’s diminishing supply is twofold. First, any increase in demand makes price increases inevitable. The supply of coins cannot be increased to meet the new demand. The only way new demand can be satisfied is with higher prices. Second, a limited supply reduces the downside risk. As prices come down, production gluts (as in the oil market) do not depress prices further and hinder a price recovery. In fact, in the rare coin investment market, low prices tend to drive coins off the market.

3. Affordability
A painting can cost a million dollars or more. But rare collectible coins seldom cost more than $100,000. Top-of-the-line art, diamonds and real estate all demand very large amounts of money for the purchase of a single item. But most of the coin investments I recommend (and they are the cream of the crop) are in the $500-to-$10,000 price range. And you can buy some important, top-quality investment coins for as little as $100. So what can you expect from the rare collectible coin market in terms of affordability? You can expect to participate no matter what your coin investment budget is.

4. Favorable Tax Treatment
This is a seldom talked about (but significant) advantage of coin investing, offered by the rare collectible coin market. You do not have to pay taxes on your rare coin profits until you actually sell the coins. If you bought 20 MS65 S-mint silver dollars for $10 each in 1977, and still had them in 1985, they’d be worth more than $6,000. Your profit on that $200 is huge. So, how much tax do you owe? None! You haven’t sold the coins yet. You could even take them to the bank and borrow $3,000 or more against them and deduct the interest expense from your tax liability! Put your money in a T-bill or CD and you have to pay yearly taxes on the interest.

5. Anonymity
All of us have different degrees of confidence (or should I say paranoia) about our government. I, personally, feel the government’s intrusion into the private financial affairs of its citizens has become a major concern for all investors. Of special note: those of you investing in coins do not have to file any special government reports. Can you expect to remain anonymous as a rare collectible coin investor? Yes!