Dear Lee,

We are often asked about “investment” collecting. What should you buy to put in a retirement portfolio along with stocks and bonds? But we got a call from a reporter last week who asked us about an investing scheme we couldn’t believe. “What do you think about investing in gold coins?” he asked. We learned from him and from later newspaper articles what auditors had discovered-that the Ohio Bureau of Workers’ Compensation had invested $55.4 million in rare coins. Then it turned out that some of the money had been used instead to buy collectibles, including “autographs and valuable papers.” The coin investments were headed by a known rare-coin expert, but who was making the other investments? Rumors circulated that some money was invested in Beanie Babies. Eventually, a search uncovered coins, autographs, political Christmas cards, art, campaign buttons, baseball cards, vintage comic books, an Olympic torch, signed Harry Potter books-and Beanie Babies. The state later learned that $400,000 in coins is missing, and that a $530,000 loan was made to a man using collectibles as collateral. One deal included the sale of a $123,000 coin for one cent. It gets worse every day. At first the newspapers reported a $13.3-million profit on the coin trades. Then investigative reporters learned that $12 million is missing. At last report, over $220 million is gone because of missing coins, loss of value, and bad loans.

We doubt if the average collector could have been caught up in a scam like this. Savvy collectors keep inventory lists, store collectibles properly, and check the reputation of anyone selling or buying for large amounts of money. But just in case, be careful. Remember: there are fakes, fakers, and scam artists who will make money from your collection if you are not careful-even if you don’t have the millions invested by the state of Ohio.