Why Buy Certified Coins
Certifying and grading coins by third party graders has become immensely popular in the past few years. The goal of a standardized grading system that everyone could follow isn't perfect because, humans being humans, not everyone sees things the same. But it is workable. Not all coin experts see things the same, either, and even with a standardized grading system in place there are variances...what is an MS66 to one person may be graded by another as an MS64. Many companies have been formed to certify coins as authentic, grade and then encapsulate them, known as slabbing. Of all those many certifying companies there are only 4 recognized as consistent, dependable and trustworthy: NGC, PCGS, ANACS and IGC.
Establishing the authenticity of a coin is the number one reason for purchasing a certified coin. The proliferation of counterfeit coins around the world has made it necessary to either know a raw coin is authentic by personal inspection or know the person you are buying it from guarantees it's authenticity. Third party graders take that responsibility and the four companies listed above have excellent reputations. Once the coin has been determined to be authentic the next step, and the next reason for buying certified coins, is to determine its condition.
The next reason for purchasing certified coins is because the condition of the coin has been determined. A coins condition is described on a 1-70 scale and is associated with descriptive terms like "Fine", "Very Fine", "About Uncirculated" and "Mint State." How much wear, the lack of damage, has it been cleaned, is it well struck? Those questions and others have been answered and depending on the grade level that is then assigned you have a very good idea, without seeing the coin, that it is what the seller says it is.
Once the coins authenticity, condition and grade have been established only then can a value be determined. I'm often asked what a particular coin is worth and the stock reply is, generally, "Whatever the market will bear." There are many sources for coin value determined by grade but in reality a coin is worth what the market is willing to pay. Value is not necessarily determined by grade. Many factors come into play when a dollar value is being determined that include rarity, condition, grade, market...and most important...how much it is worth to you!
The last reason for purchasing certified coins is that they are protected from damage in their plastic container, or slab. Accidents happen. And there are many valuable and historic coins that have been accidentally dropped or damaged in other ways by not being encapsulated in a slab. The capsule allows you to see your coin without the risk of getting fingerprints, moisture or other environmental contaminants on it. It is simple protection for your investment.
If someone is purchasing a coin because of its importance to them in some way like a gift or memento they may pay more than it would otherwise be valued as an investment. Some are willing to pay more for a single coin in order to complete a set. If you are buying strictly for investment purposes the motive will be to buy as low as possible in order to sell high at a future date. Everyone has different reasons for purchasing. The coin price guides are just that, simply guidelines to give an idea of what the market might be willing to pay for a specific certified coin. Do I ever buy raw, uncertified coins? Yes, if it's a coin I want or like and feel will add value to my collection. Will I pay the same price as for a coin that's been certified? Depends on how badly I want it, but most likely no.
Before purchasing any coin you should be able to see it to judge for yourself if it's what you want. The certification and grading process allow you to understand the condition of the coin and all you need then is a good description such as "toned", or "white hot" or similar to really get an idea of the coin. Most reputable coin dealers have a process to allow you to view the coin and decide to keep or return it. Not all dealers are the same so ask questions first before plunking down your money.
The goals are generally divergent for a coin collector or a coin investor. By purchasing coins certified by one of the 4 top tier third party grading companies you can usually rest assured that what you believe you're purchasing is exactly what you'll receive. Is the system of certification and grading perfect? No. Is it a workable system when the guidelines are followed and the company or individual you are purchasing from are trustworthy? Yes.
Peace of mind about the established condition, grade and value of the coin you've just purchased is worth the time it takes to find a certified coin of the type you're searching for. When it comes time to sell a coin or your whole collection there won't be a hassle over the coins authenticity, condition and grade and the entire transaction is simpler. In the end it pays to buy certified coins.
