Before the year 1986, liquidity in the coin market was severely limited. Because of this, grading standards were not uniform and transactions often required both buyer and seller to meet face to face, or mail coins back and forth repeatedly, until a deal was completed.
This left industry leaders deeply concerned. Because although there was expansion of the marketplace, participation by major brokerage firms was extremely limited.
The advent of an independent third party assessment of a coin’s physical condition, and backed by a guarantee, provided collectors, dealers and investors a coin market in which they could feel confident.
That confidence was due to the acceptance of the Numismatic Guaranty Corporation (NGC) and the Professional Coin Grading Service (PCGS) grading standards; additionally, there is now well over 1000 dealers nationwide.
Numismatic exchanges and computer systems link thousands of dealers. Such trade networks have made it possible for large volumes of routinely-traded certified coins to trade dealer-to-dealer, sight unseen…instantly from coast to coast, over the phone, or by computer transmission. This is possible due to the high degree of confidence that dealers and collectors have in PCGS and NGC certified coins. There are two areas of numismatics, Collecting and Investing.
Once the grading is complete, the coin is sealed inside a plastic capsule or ‘slab’. Its sonically sealed and tamper safe. This assures all which is written on the label and accepted.
To identify where the coin was minted, a letter is stamped on the coin. In the case of let’s say, the Denver mint, it is a ‘D’. Usually the mark is in the field at the 8 or 4 o’clock position. Sometimes on the back at the lower center. Next time you go to coin show, look for the mintmark.
According to the U.S. Mint, in 1988, the number of U.S. coin collectors were approximately two million. The mint estimates that there is now approximately 140 million (nearly half of the population of America), and many hundreds of thousands more globally. To date, these two coin graders have certified tens of millions of coins making the market for serious investors and collectors globally.
PCGS and NGC has given collectors and dealers a strong sense of security but you shouldn’t let your guard down. When purchasing or selling coins don’t just go based on merit. Make sure the coin is checked very closely by the grading service and yourself, because they might not bother to look for signs of wear or friction just the authenticity of the coin.
So make sure to do your homework and always have your coins thoroughly looked at.
Stay tuned for my next articles on why you should by coins now, and the different type of starter coins. From those proof sets you all have seen and heard of, to the real beauties coveted by dealers, investors and collectors alike.
Happy Gold Hunting,
Brian Bobbit, is an avid coin collector and agent, a former Precious Metals Broker for International Precious Metals Corp. in Pompano Beach, Florida, and a former Commodity Broker for International Trading Group in Coral Gables, Florida. He is a Member of PCGS, the Professional Coin Grading System (2nd largest and 2nd most respected coin grader) and NGC (National Grading Corp., Grader for American Numismatic Assoc.), as well as a Member of the Palm Beach County, Fort Lauderdale, Hallandale, and Melbourne Florida Coin Clubs.