Factors Affect Rare Coin Investing
March 10, 2010 – For the past forty years, rare coin investing has been one of the most profitable ways to invest in gold and silver. During that time, certified collector’s coins have grown in value nearly 680%. For this reason, many investors have successfully used these coins as very effective long-term investments.
The CU3000 is used as a benchmark for coin values; it is a collection of 832 coins that provides a basis for coin appreciation. In 1973, the CU3000 was valued at $1,000; as of March 10th, the index stands at $ 67,658.24, demonstrating the long-term investment value of such coins.
Rare coin investing has become very sophisticated, with Numismatic Guaranty Corporation and Professional Coin Grading Service being the leaders in standardized grading. Says Kris Oyster of managing director of numismatics for DGSE, “I am fond of NGC and PCGS. They have certainly been the industry standard. They continue to maintain quality and integrity for our industry.” The standard processes of these companies have helped to standardize grading, reduce grade-inflation, crackout coins and doctored coins.
Grade-inflation occurs when rare coins are rated too high for their value. Although it still occurs, Oster says “It is a problem, not that big. Over the last three years, NGC and PCGS have done a good job of controlling grade-inflation. I have confidence in these two services.”
Crackout coins are graded rare coins that dealers removed from the sealed NGC or PCGS cases and have regraded, hoping to receive a higher rating. Oyster claims that the reality with regrading is “that they will get the same or lower grades. I do not think that the crackout game is all that it is cracked up to be. You hear about the home runs, but you will never hear about the ten or twenty times when the crackout dealer gets the same or lower grades. There are a lot more strike-outs than home runs.”
Rare coins have produced high returns on investments. Although there are a number of factors, the values of these coins are affected most by the quality of grading that they receive.
Shawn Penny
Senior Staff Writer - Rare-Coin.org
