Disclaimer: "Past performance is not an indication of future potential values. Any opinions expressed here are just that, an opinion and they reflect a personal buying preference for investing in coins. These opinions are not meant to denigrate or devalue any company's offerings, which may or may not increase in value over time."
#1 - TV Shopping Show Dealers and Premium "Mints."
Number One on the list is the TV shopping network "coin dealers" and premium "mints" that sell nice-looking commemorative coins for exorbitant prices. Unfortunately, these coins have no additional value beyond their bullion or face value when you or your heirs eventually sell them. Some of these so-called mints that sell coins on the TV and cable-based shopping channels sell genuine U.S. Mint coins that are always priced several times higher than if the coins were purchased from a reputable coin dealer!
These shows rarely sell anything that you can't acquire elsewhere at more affordable prices, so don't impulse buy from these TV shows! Do a little research, and you'll see the same Silver Eagles at just a few dollars over spot price from traditional coin dealers. Uncirculated Morgan Dollars seem to be a prime product that TV shopping network coin dealers sell at an exorbitant price. They push these common coins as old and rare. When in fact, they can be purchased for a reasonable amount from a coin dealer or at a local coin show.
Another area that TV shopping networks feature in their coin shows is Proof sets and Uncirculated Mint Sets. They usually bundle these coins into ten, twenty-five, or fifty-year collections. They state that they are "rare" or "difficult to obtain" because they have assembled these sets into multi-year runs. Your local coin dealer can build a collection of Proof or Uncirculated Mint Sets for you at a fraction of the cost. Therefore, never buy coins from TV shopping shows!
Next on the list are TV coin dealers selling encapsulated or certified coins many times their actual value. They market them as rare because they are certified in a particular grade. Additionally, they may assemble sets of slabbed coins that are sold as difficult to assemble. Some dealers may put a little sticker on the encapsulated case indicating that it holds a certain value due to its quality. All of these coins can be obtained at a more reasonable price from your favorite coin dealer.
Finally, sets featuring the Presidential one-dollar coins are in full swing. These so-called "coin dealers" assemble these sets for slightly over face value, put them in a fancy case, and sell them for orders of magnitude over their true value. Don't fall for these fancy advertisements that put ordinary coins in fancy cases.
#2 - National Collector's Mint
Second on the "do not buy" list are coins issued by the National Collector's Mint. The United States Mint has issued warnings about this company's misleading advertisements in the past, particularly its "Freedom Tower" coins. National Collector's Mint advertisements imply that Freedom Tower coins and other medals have meaningful amounts of precious metal in them when in actuality, they do not.
Additionally, they produce a large quantity of "tribute coins" which are copies of genuine U.S. coins. They do follow United States law and mark each coin as "COPY" so they are not confused with genuine coins. However, they charge anywhere from $15 to $30 per coin. The actual market value is just a few dollars. Therefore, these tribute coins make a poor investment.
Also, despite the perception they often give to the contrary, nothing this "mint" makes has any association whatsoever with the genuine United States Mint, and it is a generally accepted opinion that the coins they sell are, and will remain, virtually worthless as an investment collectible. If you're looking for investment-grade coins, concentrate on high-grade United States coins.
#3 - Franklin Mint & Similar Companies
Next on the "do not buy list" are coins and medals from the Franklin Mint and other premium collectibles mints such as the Bradford Exchange, etc. They are aggressive marketers who do sell genuine bullion coins, but their coins usually do not have any premium after-market value among coin collectors and investors.
You will typically find that when you buy a one-ounce silver coin that it is only worth the value of its silver bullion when you go to sell it. Beware of rubbish similar to the Franklin Mint's colorized Obama coins!
#4 - Spurious Sets
Another lousy investment is "spurious set" coins. These sets are popular TV shopping network products. You can also find these sets advertised in magazines and at flea markets. "Spurious sets," are coin sets that are put together out of lower-grade common coins according to some theme.
The company assembles the low-grade coins into sets and places them into fancy plastic holders with elegant packaging. Common themes include coins that were all minted during World War II, the Vietnam War, or they are from different countries that celebrated Marilyn Monroe or some other bygone celebrity. Such coins are usually genuine, but they probably won't be worth what you paid for them when you go to sell them.
#5 - Modified Coins
The final type of worthless coin investment is modified coins, such as genuine U.S. Mint products that have been altered by adding holographic stickers or coloring. Coin collectors and numismatists consider these coins as "damaged," and you will only get bullion value when you go to sell them. Some dealers will discount the buying price even further because of the added impurities that the paint and other elements applied to the coins.
The Best Types of Investment Coins
According to many experts, the best type of investment coins are rarer, key date coins issued by the United States, in the best grade you can afford. If you can't afford to spend $2,000 on a coin to buy a key date in a high grade, then purchase common coins in the finest grades you can afford.
Lower-grade, common coins have historically not appreciated as much in value as key date coins do, so they are probably not a good investment choice (although they're great for filling up the holes in albums, especially with kids helping out!)
In general, novice coin collectors collect pre-1965 90% silver U.S. coinage and silver world coins in high grades. These coins are excellent choices for the average person on a tight budget. Numismatists and coin experts believe that most types of U.S. Nickels are undervalued. For obsolete coins, most Walking Liberty, Franklin, and silver Kennedy Half Dollars are underrated according to many numismatic experts but only buy high-grade coins.
A final area of coin investing to consider is the bullion coins, especially coins that are traded at close to spot price (as opposed to Proof Silver Eagles and other premium United States Mint offerings.) With the growth of China and India and the likelihood that they will become "superpowers" within the next generation, all precious metals are expected to rise over the long term. Copper, in particular, is expected to boom compared to current prices. However, when purchasing precious metals you are accepting the risks and rewards of investing in a volatile market.
Edited by: James Bucki