February 2010

WHAT TO COLLECT NOW?

This article is particularly directed to our readers whose first real experience collecting coins was the U.S. state quarter series. You may have already added the D.C. and U.S. territories quarters issued during 2009. You've enjoyed assembling one or more quarter sets, perhaps with or for your children or grandchildren. Now, you're thinking about collecting something else but aren't sure what.

The first thing to do is to consider your interests and budget. Is there a particular time or place that fascinates you, perhaps early U.S. history or the land of your ancestors? Do you like a particular denomination or series of coins, such as Morgan silver dollars? Or does getting brand new coins as they're issued give you a thrill? And what can you reasonably afford? Collecting classic U.S. gold coins can be fun and potentially profitable, but not everyone has the resources to spend hundreds or thousands of dollars on each coin.

One popular and inexpensive collecting option is to assemble one or more series of coins now in circulation by date and mintmark. For example, many collectors have started with the Lincoln cent. With patience you'll eventually find most dated 1959 and later by searching your change, coin jars, rolls obtained at the bank, etc. You can also expand your collection of Washington quarters to dates that preceded the first state quarter. Helping children assemble coin sets from circulation can be fun for everyone. Should you decide to add coins no longer available in circulation or want to collect uncirculated examples, with a few exceptions, each coin in all currently issued U.S. coin series can be purchased at a modest price from coin dealers.

If there's a particular part of history that intrigues you, consider adding coins from that era to your memorabilia. Coins from ancient Rome, Victorian England or the U.S. Civil War years, for example, are tangible pieces of the past, and the figures and symbols on them give insights into the time when they were issued. Similarly, if you're researching your family history, coins in use during the time of your ancestors (e.g. issued the year they were born) are real souvenirs from those days.

As far as collecting new coins, more original designs are on the way. Only three years and 12 coins have been issued so far in the U.S. Presidential dollar coin series. At least six more years and 26 more coins are yet to come. With low mintages and many banks unwilling to order them, you may have to purchase these coins from a dealer, but so far they're generally available at under twice face value. And in April the U.S. Mint will release the first coin in the America the Beautiful quarters program for a National Park or other important site in each of the 50 states, the District of Columbia and five U.S. territories. Under the authorizing legislation, a five ounce silver version of each quarter will also be issued.

We haven't even mentioned type sets, error coins, paper money, tokens and other specialties in the world of numismatics. The possibilities are endless. Choose one or more areas you find interesting and within your budget, and enjoy a great hobby for many years to come.

DID YOU KNOW?

Which do you think will bring a higher price at auction - a late 1950s Thunderbird with high mileage, rusted panels and torn seats or the same model car in pristine condition that's rarely been driven? As with cars and most other collectibles, the condition of a coin or banknote often makes a dramatic difference in demand and what knowledgeable collectors are willing to pay.

A grade is commonly used to summarize the condition of a numismatic collectible. A mint state grade applies to a coin that has no trace of wear, and a circulated grade will be appropriate to any coin that does. A similar system is used for grading paper money.

Several businesses that grade coins and paper money for a fee have sprung up during the last 25 years or so. There is a disturbing tendency among some collectors to forgo developing personal grading skills and rely exclusively on the opinions of third party grading services. That's not to imply that grading services have no role in the hobby, but rather that collectors who rely solely on these services are shortchanging themselves and more likely to make expensive purchasing mistakes.

First, the value of some coins is too low to justify the expense of being graded by an independent services. When a coin is deemed valuable enough to send to a grading service, it may receive different grades depending on which one is used. Coins in holders from services that the market considers to commonly overgrade trade at a discount (often large) to those in holders from services considered more accurate. Furthermore, the same coin may receive different grades if submitted more than once to the same service. That's because grades are opinions, and opinions may differ depending on which employees are offering them and whether they're feeling well or sick, fresh or tired, in a good mood or cranky, etc. Some individuals with a keen eye look for third party graded coins that, if resubmitted, may receive a higher grade and can then be sold for a nice profit. Meanwhile, coins that have been overgraded or are low end for the assigned grade languish in the same holder indefinitely. A savvy buyer with an eye for coins forms his or her own opinion on a coin's grade, compares it to the grading service's opinion and acts accordingly. Those who look only at the service's opinion risk overpaying for substandard material.

Being a reasonably good grader is essential for anyone spending significant money on coins or paper money. In upcoming issues of our newsletter, we'll look in more detail at how coins and paper money are graded and how to improve those skills.

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