When it comes to purchasing rare currency, nothing matches the thrill of collecting rare historical pieces. Commonly called numismatics, these investments are prized for their collectible value rather than their base metal content. Depending on the condition and availability of the note, it may be worth several hundreds—or even thousands—of dollars above its face value.
However, it takes much more than a lucky find to successfully invest in numismatic coins. Wise investors often spread their investments across bullion, collectibles, and numismatics to protect against sudden changes in any market. If you’re curious about the potential investment value in numismatics, there are a few factors to consider before buying any collectible coins.
How to Value Numismatic Coins and Currency
The value of numismatic coins and currency must take into account several factors, including grading, age, rarity, mint mark, popularity, and whether the item is part of a larger collection.
The grade—or professional assessment of the coin’s condition—is one of the most important factors when buying or trading numismatic coins. Grading should only be performed by reputable numismatists who will objectively determine its condition based on several factors. The better the condition, the higher the value.
Coins are assessed using the Sheldon Scale, an industry-standard grading system ranging from 1 to 70. Grades from MS-1 to MS-59 can be called the “collectible grades,” while AU-50 to AU-58 are considered close to “uncirculated” and have a higher value for collectors. Grades MS-60 to MS-70 are the most desirable for collectors, with the coins close to their mint state. MS-70 is the highest rating, and coins like this are nearly flawless, rare, and extremely valuable.
The most well-regarded independent coin grading services include PCGS (Professional Coin Grading Service) and NGC (Numismatic Guarantee Corporation). After grading, these third-party authorities put each numismatic coin in a certified coin slab to authenticate it as the one the company graded.
Some coin dealers offer grading services, but getting an independent grade is always better. For one thing, a dealer could attempt to inflate the coin's price by appraising it for more than it’s worth. There have also been instances of slabs being falsified or tampered with to misrepresent a coin’s value. Counterfeiters may get coins graded by a less reputable company but encase them in a PCGS or NGC slab. If the slab is broken, hard to read, or has indistinct markings, the coin inside may not be worth your money.
The age of a numismatic coin has a direct impact on its value. While older coins are generally worth more than newer coins, the value is more closely tied to a specific year or mintage. You may have a coin over 100 years old, but if it’s relatively common or a poor grade, one that’s only a decade or two old could be worth far more.
Rarity is a delicate factor in the value of numismatic coins. If a coin is too rare, it may not be considered collectible, resulting in a lower value. Ideally, you want a coin with a limited minting or one with only a handful of good quality still in existence. It’s best to research how many of that type of coin have been bought or sold in the past few years to determine whether there’s a market for it before buying.
The mint mark tells you where the coin was minted. There have been various mint facilities across the United States since its inception, including San Francisco, Denver, and Philadelphia. Each mint produces a different number of coins, so coins minted in the same year but at other locations could have widely different values. There may also be specific marks or errors in a coin's striking that make it more valuable.
Certain coins may be more popular because of their historical significance, beauty, or design. Popular collectible coins are valued more and have a higher numismatic premium than others.
Coins enter a new level of numismatic value when they become part of a collection. If you sell a few random coins of desirable years and mintages, you can expect to get roughly the numismatic premium plus the spot price of the metal they contain. On the other hand, selling a collection or an entire set of certain coins can result in a dramatic profit even above the value of the individual coins. Collections are highly sought-after because buyers don’t have to hunt down missing coins to complete the set. They can also allow savvy sellers to increase their return on less valuable coins by bundling them as part of a set.
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