| In coin collecting the condition of a coin is | | | | Damage of any sort, such as holes, edge dents, |
| paramount to its value; a high-quality example is | | | | repairs, cleaning, re-engraving or gouges, can |
| often worth many times as much as a poor | | | | substantially reduce the value of a coin. Specimens |
| example—although there are always | | | | are occasionally "whizzed"--cleaned or polished in |
| exceptions to this general rule. Collectors have | | | | an attempt to pass them off as being higher |
| created systems to describe the overall condition | | | | grades or as proof strikes. In general, the buyer is |
| of coins. One older system describes a coin as | | | | cautioned to be careful of any unknown seller's |
| falling within a range from "poor" to "uncirculated". | | | | claims. Because of the substantially lower prices |
| The newer Sheldon system, used primarily in the | | | | for cleaned or damaged coins, some specialize in |
| US, has been adopted by the American | | | | their collection. There is a market for almost any |
| Numismatic Association. It uses a 1–70 | | | | rare or obsolete coin. |
| numbering scale, where 70 represents a perfect | | | | Many people search loose change and bank |
| specimen and 1 represents a coin barely | | | | wrapped rolls of coins for collectible coins. |
| identifiable as to its type. | | | | Amazingly, old coins continue to circulate. Some |
| Several coin grading services will grade and | | | | over 100 years old! Search for terms like "coin roll |
| encapsulate coins in a labeled, air-tight plastic | | | | hunting" to see web sites that are dedicated to |
| holder. This process is commonly known as | | | | this hobby. |
| "slabbing", and is most prevalent in the US market. | | | | Coins as an investment |
| Two highly respected grading services are the | | | | A common reason given for purchasing coins is as |
| Numismatic Guaranty Corporation (NGC) and | | | | an investment. Coin prices can be cyclical, and |
| Professional Coin Grading Service (PCGS). | | | | prices may drop for coins that are not in great |
| However, professional grading services are the | | | | long-term demand. In addition to demand, |
| subject of controversy because grading is | | | | condition and rarity (which can be estimated via |
| subjective—a coin may receive a | | | | mintage figures) are also determinants in pricing. |
| different grade by a different service, or even | | | | Age of a coin per se is not a significant factor. |
| upon resubmission to the same service. Due to | | | | Many of the reasons given for investing in coins |
| potentially large differences in value over slight | | | | are similar to those given for investing in stamps |
| differences in a coin's condition, some commercial | | | | or gold. As with most collectibles, a coin collection |
| coin dealers will repeatedly resubmit a coin to a | | | | does not produce income until it is sold, and may |
| grading service in the hopes of a higher grade. | | | | even incur costs (e.g. for safe deposit box |
| Buyers are encouraged to look into the quality | | | | storage) in the interim. |
| and features of the various grading services | | | | Coin collecting trivia |
| before deciding to purchase a coin based solely on | | | | The first international convention for coin |
| the grade given by a service. The grading | | | | collectors was held in August 15–18, |
| services came into being (PCGS being first) in an | | | | 1962, in Detroit, Michigan, sponsored by the |
| effort to bring more safety to investors in rare | | | | American Numismatic Association and the |
| coins. While they have reduced the number of | | | | Canadian Numismatic Association. Attendance was |
| counterfeits foisted upon unsuspecting investors, | | | | estimated at 40,000. |
| and have improved matters substantially, because | | | | The scientific study of coins is known as |
| of the differences in market grading (which | | | | "numismatics". A numismatist may or may not be |
| determines the price) and technical grading, the | | | | a coin collector. A coin collector may or may not |
| goal of creating a sight-unseen market for coins | | | | be a numismatist. |
| remains somewhat elusive. | | | | |