As a coin collector or an investor of coins, you no
doubt have asked yourself the question of why you should buy professionally
graded coins. These coins are also known as slabbed or certified vs. an
uncertified coin which is known as “raw”. The term “slabbed” came about
because certified coins are in a plastic slab.
A topic such as this is quite controversial as each side of the coin has its
staunch proponents. In this article though, we will concentrate on the
advantages of graded coins, specifically PCGS graded
coins. As you may know,
there are several other grading services out there but PCGS has been ranked
the most consistent in grading and ability.
PCGS, a subsidiary of Collectors Universe, started grading
coins for the
public in 1986 and since then PCGS has graded millions and millions of
coins.
So why buy PCGS coins? Let’s answer that question now.
The first reason, and this applies to all slabbed
coins, is that a slabbed
graded coin is now protected from further damage. Imagine taking out your best
coin, a 1942-S Walking Liberty in what you believe to be MS-67 condition. In
this condition, PCGS gives an estimated value of $25,000.00. It is an
absolutely beautiful coin. To prepare for this moment, you put on your white
coin gloves so as to not pass body oils to the coin. As you pick it up to
examine it the telephone rings, or your two year old snuck up behind you and
nearly trips you. The coin goes flying out of your hands and is rolling across
your floor right towards the floor heat vent. You make a mad dash and dive to
save the coin, but it is too late. The coin rolls over the lip of the heat
vent and slips between the cracks into your house heating duct. You lift the
vent out of place and reach in for your coin. Fortunately it did not go around
the bend and begin the spiral down to the furnace. It may as well have. Your
once $25,000 coin now has several scrapes, scuffs, and a ding smack dab above
“In God We Trust” due to the screw it landed on in the vent. This same coin in
MS-65 condition is worth $700. Even worse, in MS-64 it is worth $110. While
the coin still has its original mint luster, the physical damage is there. Do
you think this is an extreme example? Maybe, but I guarantee you that many a
coin has been accidentally dropped by dealers and collectors reducing its
grade by a couple notches and its value by countless thousands of dollars.
Personally, and sadly, it has happened to me. I once dropped what I thought
would be a MS-66 Red 1909 VDB Lincoln cent. Upon close examination after I
dropped it, I noticed a few scrapes and scuffs not previously their. Yes, they
were minor and barely visible, but I had it graded anyway, and it came back as
MS-65. While my example was not with a $25,000 coin, it happens. I now clear a
special area for handling GEM coins so this never happens again. A certified
coin comes in a hard plastic container that not only protects it from silly
mistakes but also it is sealed to further protect it from the elements. Yes,
the natural elements (air pollution) can damage
coins over long periods of
time. Most grading companies will encase the graded coin in an air-tight
container to ensure preservation.
The second reason to buy a PCGS slabbed coin is that any coin graded a
specific grade will retain that grade. A MS-65 coin will always be a MS-65
coin, unless of course you submit it for re-grading. With PCGS
coins though,
you can be fairly certain in the consistency of graded
coins. With other
grading services, inconsistencies bring uncertainty into an assigned grade.
The third reason to buy PCGS graded coins is that when it comes time to sell,
PCGS graded coins will command a premium over other slabbed
coins. As an
example, I checked recent sales of the very common 1921 P Morgan dollar in
MS65 condition. Those certified from PCGS were commanding prices upwards of
50% over similarly graded coin from other grading services. While this is an
extreme case, it simply points out the faith by collectors in PCGS
coins.
Naturally, it will cost you more to buy PCGS coins than other certified coins.
The fourth reason to purchase PCGS certified coins is a coin graded by PCGS
gives it instant credibility. Grading services first came about so that
coins
could be bought and sold without the buyer having to see it first. This was in
the age before digital cameras and the internet. While there was a grading
system in place in the early 80’s, grading was very arbitrary. A coin graded
F-12 by one person would grade G-4 by another. By introducing an outside,
disinterested party into the equation, both sides of a transaction could agree
that the grade was correct. The idea was to create a system whereby dealers
could trade/buy/sell coins without seeing them first. The idea was a hit.
Today PCGS graded coins offer instant credibility. Whether you are buying or
selling though, always buy the coin and not the grade. I have regrettably
bought a few truly ugly high grade PCGS coins. While they were in decent
shape, some had very unattractive toning and had I seen the coin first, I
would not have bought it. Even though a coin carries a certain grade, you
still need to ask details about certified coins and look at them first.
A fifth reason for PCGS graded coins is if you are a variety collector, you
can be 99.9999% sure that a variety that has been graded is authentic. PCGS
has demonstrated over the years ability better than most other services in
detecting fakes. If you are buying a 3-legged buffalo, a PCGS graded coin can
offer additional insurance of authenticity, especially if you are buying over
eBay or some other auction service
With the introduction of the State Quarter program several years ago, coin
collecting has seen a surge in the number of collectors. Thousands and
thousand of new collectors have entered the hobby and with that there will be
a higher demand for certain coins. While most of us began our hobby for the
pure enjoyment of collecting, we still like to know that our investment is
somewhat safe. I believe, and this is my opinion only, that with more and more
collectors entering the hobby, certain high-end certified
coins will continue
to rise in value due to demand. As those collectors who started on State
Quarters mature in their collecting endeavors, they will no doubt begin to
collect older coins such as Walking Liberty halves and Morgan Dollars. Most
likely this will be coins that have been certified. This will no doubt raise
the value of certified coins. But this is only my guess.
Coin Collecting can be a wonderful hobby and as you refine your collecting
interests, PCGS graded coins can make a wonderful addition to your collection.
As always,
Happy Collecting!
Keith Scott has been a collector for over 30 years and
owns a small internet-based coin store at
www.mountainviewcoins.com
© 1992-2024 DC2NET™,
Inc. All Rights Reserved