Investing in Collectible Coins

Collectible coins have some historic or aesthetic value to collectors.  The value of many collector coins exceeds their melt value because the precious metal content is so small.  Coin collectors refer to this collectible value as numismatic value, and it is determined by factors such as the type of coin, the year it was minted, the place it was minted, and its condition—or “grade.”

Dealers who sell collectible coins often have valuable coins graded by professional services.  A grader examines the coin’s condition based on a set of criteria.  Then the grader assigns it a numerical grade from one to 70, and places it in a plastic cover for protection.  But factors like “overall appearance” and “eye appeal” are subjective, and the grade assigned to a particular coin can vary among dealers.

Expect to hold your investment for at least 10 years before possibly realizing a profit.  That’s because dealers usually sell collectible coins at a markup.  In addition, the market for numismatic coins may not be the same as the market for precious metals or bullion coins.  It’s possible that the price of gold can increase while the value of a gold numismatic coin decreases.

For more information click here.

Teaching Suggestions

  1. Ask Students to make a list of the risks and rewards of investing in collectible coins.
  2. Ask students how they can protect themselves from fraudulent practices in the collectibles market.

Discussion Questions

  • What are some important questions to ask before you invest in collectible coins?
  • Is it possible to make a practical decision about buying a particular coin based on a photo or conversation with the seller?
  • Why is it important to get a second opinion about the grade and value of the coin you are considering to buy?

Fraud Victims Vulnerable to Severe Stress, Anxiety and Depression

The FINRA Investor Education Foundation issued a new research report, Non-Traditional Costs of Financial Fraud, which found that nearly two thirds of self-reported financial fraud victims experienced at least one non-financial cost of fraud to a serious degree—including severe stress, anxiety, difficulty sleeping and depression. While the Stanford Financial Fraud Research Center estimates that $50 billion is lost to financial fraud every year, the FINRA Foundation’s innovative research examines the broader psychological and emotional impact of financial fraud.

“Fraud’s effects linger and cause distress well after the scam is over. For the first time, we have data on the deep toll that fraud exerts on its victims, and the results are sobering. This new research underscores the importance of the FINRA Foundation’s work with an array of national, state and local partners to help Americans avoid fraud, and assist consumers who have been defrauded,” said FINRA Foundation President Gerri Walsh.

The research report found that:

  • nearly two thirds (65 percent) reported experiencing at least one type of non-financial cost to a serious degree; and
  • most commonly cited non-financial costs of fraud are severe stress (50 percent), anxiety (44 percent), difficulty sleeping (38 percent) and depression (35 percent).
  •  Beyond the psychological and emotional costs, nearly half of fraud victims reported incurring indirect financial costs associated with the fraud, such as late fees, legal fees and bounced checks. Twenty-nine percent of respondents reported incurring more than $1,000 in indirect costs, and 9 percent declared bankruptcy as a result of the fraud.

Additionally, nearly half of victims blame themselves for the fraud—an indication of the far-reaching effects of financial fraud on the lives of its victims.

For more information, click here.

Teaching Suggestions

  • Ask students to list a few suggestions to protect themselves from financial fraud.
  • Explain how FINRA can assist consumers who have been the victims of financial fraud.

Discussion Questions

  1. What are a few indirect financial costs associated with funds?
  2. Why nearly half of victims blame themselves for being victims of financial fraud?
  3. How and where should you report financial fraud?

Fraudulent Debt Relief Operation

The Federal Trade Commission (FTC) has charged a debt relief company with falsely representing to financially distressed homeowners and student loan borrowers that it would help get their mortgages and student loans modified.  At the FTC’s request, a federal court has temporarily halted the operation.  The FTC seeks to permanently stop the alleged illegal practices and obtain refunds for affected consumers.

According to the FTC’s complaint, Good EBusiness LLC deceptively marketed home loan modification services and illegally charged an advance fee of 1,000 to $5,000.  The agency alleges that the company falsely claims that it can lower monthly mortgage payments, reduce mortgage interest rates usually within a few months, and falsely promise full refunds if they fail.  The FTC’s complaint also alleges that Good EBusiness, using the names Student Loan Help Direct and Select Student Loan; Select Student Loan Help LLC; Select Document Preparation Inc.; illegally charged a fee of $500 to $800 for student loan relief services.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of sources they may rely on for help when they are overburdened with debt problems.
  • What questions should you ask in finding the best credit or debt counselor?

Discussion Questions

  1. Which federal consumer credit law regulates debt collection practices and what are its major provisions?
  2. What options of solving credit and debt problems are available to individuals?

Securities and Exchange Commission (SEC) Warns of Government Impersonators

The SEC has issued an investor alert warning people about fraudulent solicitations that purport to be affiliated with or sponsored by the Securities and Exchange Commission.

The SEC does not endorse investment offers, assist in the purchase or sale of securities, or participate in money transfers.  SEC staff will not, for example, contact individuals by telephone or e-mail for purposes of:

  • seeking assistance with a fund transfer
  • forwarding investment offers to them
  • advising individuals that they own certain securities
  • telling investors that they are eligible to receive disbursements from an investor claims fund or class action settlement; or
  • offering grants or other financial assistance (especially for an upfront fee).

If you receive a telephone call or e-mail from someone claiming to be from the SEC (or other government agency), always verify the person’s identity.  Use the SEC’s personnel locator, (202) 551-6000, to verify whether the caller is an SEC staff member and to speak with him or her directly.  In addition, you can call the SEC at (800) SEC-0330 for general information, including information about SEC enforcement actions and any investor claims funds.

For more information, click here.

Teaching Suggestions

  • Ask students to visit other websites, such as, consumer.gov and investor.gov for additional tips on investing wisely and avoiding fraud.
  • Ask students to find a list of international securities regulators on the website of the International Organization of Securities Commissions (IOSCO) and a directory of state and provincial regulators in Canada, Mexico, and the U.S. on the website of the North American Securities Administrators Association (NASAA).

Discussion Questions

  1. What actions can you take to protect yourself from government imposters?
  2. What are the tell-tale signs that an impersonator is contacting you to steal your financial information?

Defrauding Investors

On May 28, 2015, the Securities and Exchange Commission announced fraud charges against William Quigley.  He is accused of creating a scheme to steal from investors and from a brokerage firm where he worked as the director of compliance.

The SEC’s Enforcement Division alleges that was involved in a scheme to solicit investors to buy stock in well-known companies or supposed start-ups on the verge of going public.  The SEC alleges that:

  • The securities were never purchased for the investors.
  • Quigley wired the money out of the country or he withdrew it from ATM’s near his home.
  • he had accomplices, two brothers who live in the Philippines.

For more information, click here.

Teaching Suggestions

  • Have students prepare a position paper on how to protect themselves from investment fraud.
  • Have students go to the Securities and Exchange Commission website (sec.gov) to learn how SEC protects investors and maintains fair, orderly and efficient markets.

Discussion Questions

  1. How can federal, state, and local governmental agencies protect investors from investment fraud?
  2. What punishment should be meted out to investment fraudsters?

3 Ways to Diversify Retirement Savings Beyond Stocks

“Reluctant to put more of your hard-earned money aboard the roller coaster known as the stock market?  Then it may be a good idea to diversify your retirement savings with other assets, which can reduce your overall risk.”

In this article, Cliff Goldstein suggests three different alternatives that could help you increase the diversification in your investment portfolio.  Of course each investment alternative–real estate, peer-to-peer lending, and precious metals–comes with risks that should be carefully considered before making any decisions.  Along with the potential risks for each investment, the advantages of each investment  alternative are described in this article.

For more information, click here

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Reinforce why investors should use asset allocation to diversify their investments.
  • Point out the reasons why some people choose real estate, peer-to-peer lending, and precious metals in place of or in addition to more traditional investment alternatives.

Discussion Questions

  1. Pick one of the investment alternatives in this article–real estate, peer-to-peer lending, or precious metals. What are the advantages of the investment you chose?  What are the disadvantages of the same investment?

2.  Assuming you had $75,000 to invest.  Would you use one of the three investment alternatives described in this article or would you prefer a more traditional investment in stocks, bonds, or mutual funds?  Explain your answer.