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 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 lustre, 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 of 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 an MS-66 Red 1909 VDB Lincoln cent. Upon close examination, after I dropped it, I noticed a few scrapes and scuffs not previously there. 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 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. An MS-65 coin will always be an 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 the 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 them 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 for details about certified coins and look at them first.
With the introduction of the State Quarter program several years ago, coin collecting has seen a surge in the number of collectors. Thousands and thousands 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 endeavours, they will no doubt begin to collect older coins such as Walking Liberty halves and Morgan Dollars. Most likely these 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.