Expert: Joe Hylas - 10/28/2008

Question
At what price range should I start buying certified coins?  I'm collecting mint state coins and have worked my way back to the 1940's and coin prices have gone way up with dramatic jumps from one grade to the next.

Answer
Hi Greg,

My advice to collectors is to collect PCGS and NGC certified coins. If you are buying "raw" coins, you better know how to accurately grade them.  It would be very easy to lose 50% of your money by purchasing an overgraded coin.  You can buy certified coins for $10, just the cost of certifying them.  As a dealer who send coins in for certification, I will not send in common date Morgans Dollars for MS-63 grades, it simply doesn't pay to put the money into a holder.  You have to look at each coin individually.  I would have to say that any coin valued over $50 should be certified.

For years, dealers would advise collectors to buy the highest grade they can afford.  That is sound advice if you have an unlimited budget and don't care how long it takes to complete your set.

I have taken a different approach.  I believe it is in the collector's best interest to buy the "value grade" coins.  I don't know of anyone else who has coined this phrase or advises colectors to take this approach but it seems to make sense, at least to those I have advised.

If a coin is $1,000 in MS-65, and the next grade down (MS-64) is $300, I call the MS-64 a Value Grade coin.  Certainly look at the population of the coins because in some cases, if there are 10,000 value grade coins, you may want to go for the higher piece simply because there are too many Value Grade examples available.

My rationale is this;  when that MS-65 that today is valued at $1,000 rises to say, $5,000 , there will be fewer buyers for  the $5,000 coin.  The coin you paid $300 for may at that point be worth $2,000 which is a more affordable example, will have more collectors vying for it, and actually appreciated at a higher percentage then the MS-65.

I am not saying that this is a hard and true rule, but it may give you some insight into appreciation and pricing logic.  I like this logic for coins where the price triples or quadruples between grades, not when the price merely doubles or less.  Personally, I would rather have 3 1897-O Morgans in MS-64 ($16,000 each) than 1 MS-65 for $55,000 and have money left over.  But Coin Collecting can be an ego thing, some people want to have a particular coin simply because no one else can have it.  It's really all up to you.

Regards
Joe Hylas
www.AllCoins.US
Omega Precious Metals, Inc.