Coins | Collectibles & Collectors Items

You must have heard of people collecting coins for their children and grandchildren to present them as an investment when they attain a certain age. Many people collect coins for a long time, but do it for pleasure, as a hobby. So, our first advice is, collect coins only if you love doing it and collect something only if you feel it's worth holding on to. Obviously, there will be host of experts who will bombard you with their well thought out suggestions on what you should buy, but our take in this regard is, buy a coin only if you have a deep desire to possess it, and, remember, the value of coins can only go up.

Evaluating A Coin
Coins, like all other collectible items, are valued according to three criteria: rarity, demand and condition. The rarity obviously depends on the year printed on the coin. But in some cases, especially with US mint coins produced in 1798, there is a persistent doubt among collectors that some of them were actually minted in 1799, but the dies of 1798 were kept on being used until they became unusable. You might need the guidance of experts if such technicalities indeed arise when making a decision on whether or not to buy a particular item.

Demand for a coin obviously depends on its rarity. But another important reason why a particular issue becomes hotly sought after could be some oddity or quirkiness in its manufacture or some peculiarity in the die. Some other coins such as US large cents are also in great demand since they were never minted again after they went out of circulation in 1857. But it is very difficult to really quantify demand for a coin, since it depends on many factors other than rarity. Like, for example, some Newcomb variety large cents might be in great demand among large cent collectors, but you might not be able to even recoup your investment if try to sell it to your local coin collector. Nonetheless, there are certain coins which are almost always in great demand. Such 'celebrities' include true collector coins such as 1793, 1799 and 1804 US Large Cents, 1877 Indian Heads Cents and 1909-S VDB Lincoln Cents.

Grading A Coin
The grade or condition of a coin determines what value it can command in the market. Hence, grading is of vital importance. The condition of the planchet (the blank coin) and the die variety are two very important criteria which determine the grade of a coin. Generally the grade of a coin gets diminished due to years of use, storage and rubbing it suffers over the years.

William Sheldon was the first person who tried to provide a scale for grading coins. The scale runs from 1 to 70 and the grades start from Poor to Mint State (i.e. uncirculated) with P-1 being the worst and MS-70 being the best. The grades which lie in between are Fair-2, AG-3 (about good), G-4 to G-7 (good), VG-8 to VG-11 (very good), F-12 to F-15 (fine), VF-20 to VF-35 (very fine), XF-40 to XF-45 (extremely fine), AU-50, AU-55 and AU-58 (about uncirculated), and, the best being MS-60 to MS-70 (mint state), with MS-70 representing the perfect coin.

The problem most collectors face is not with the gradation system but with the objectivity of the gradation itself. Either you may depend on the word of the dealer or you have to depend on some third party expert. It is my opinion that third party gradation is always the better option. There are three bodies that you can trust. They are PCGS, ANACS and NGC.All three are equally good; you may get the coin graded (also known as 'slabbed') by any of them.

A very important point to remember is the US grading system rates more highly than the UK one, for example a US graded "mint state" might not be as good as an "extremely fine" coin in the UK. Another point to note is the US grading system is not very specific about grading hammered coins, those which were made by hand (with a hammer and hand held dies) as opposed to milled coins (which are made by machine).

How To Store Coins
After you've acquired coins, you must spare some thought on how to store them. It's not necessary to store them in fancy coin boxes but adequate care must be taken so that they do not lose value during storage.

Don't keep your coins in jars, shoe boxes, or over-the-counter plastic containers. Plastic containers are a strict no-no since polyvinylchloride can damage your coin. Over a period of time, the sticky green film that can migrate from the container to the coin can cause severe damage.

If the coins rub against one another, their value can be lowered. Also, there are some corrosive materials which can degrade the value of a coin. So, take extra precaution while storing coins.

Coins are valuable and it's needless to say; you should store them in some safe area where they will be out of reach of prying strangers or over inquisitive guests. After your collection has reached a reasonable size, it would be wise to invest in a safe deposit box. Some collectors rent out safe deposit lockers in banks to store their more expensive collections.

Cleaning Your Coins
There is a general feeling that the brighter a coin is the greater is its value. Nothing can be farther from truth. NEVER clean your coins if they are collector items and are really valuable because cleaning never improves their grade, rather drastically reduces their value up to sometimes 90%.

So, it's better to leave them as they are.

Conclusion
Collecting coins is very common hobby. It's a profitable one too. Since the value of the coins can only increase. Some people even collect coins as an investment. When you acquire a coin, confirm its grade because along with rarity it is the other criterion which determines its value. Take suitable precaution while storing coins so that they never lose their value during storage. And, never clean the coins, you may actually end up making them less valuable.