Many new investors may not understand the importance of purchasing certified coins. Of course, the reason for your collection may have some impact on this decision, but if you intend to buy authentic rare coins and are paying market value for them, you want to ensure they are certified. Simply, certified coins are those that have been graded and authenticated by an independent grading service.
While the grading scale has been improved upon since its beginning of good, fine, and uncirculated, there is still room for disagreement among dealers. In addition, it may be very difficult for a buyer to know whether a coin is really MS-65 or just MS-60, leaving them at the mercy of the dealer. Due to the often wide price range between two grades, this often results in buyers overpaying for coins.
Third Party Grading Services
To prevent this discrepancy among dealers and their grading, and to make the buying and selling of rare coins easier, coins can now be graded by independent grading services. There are currently four top independent grading services: American Numismatics Association Certification Service (ANACS) which began in 1972; Professional Coin Grading Service (PCGS) which was started in 1986; Numismatics Guaranty Corporation (NGC) which was started in 1987; and Independent Coin Grading (ICG) which began in 1998. As a general rule, PCGS and NGC are considered the most reliable and consistent graders of the four companies. There are several other companies that grade coins but most are not considered reliable by most numismatists.
Rare coins that have been graded and certified by one of these four companies will usually bring the top market price for the grade where certified coins by other companies will likely be discounted. The top four grading companies stick closely to the ANA’s standards of grading and generally provide more consistent grading. However, it should be noted, that the four companies may not grade the same coin equally.
When you purchase coins graded by one of these companies, you can be comfortable paying the market value for that grade. It’s not likely that the grade will be challenged if you later decide to sell the coin as long as you do not remove it from its capsule. Generally, certified coins have more liquidity than other coins and in fact those certified by these four may be more liquid than others. It’s best to stick with certified coins when purchasing and collecting rare coins.