Through the mid-1980’s, rare coin prices were determined by individual dealers using their own subjective criteria to judge the quality or condition of a coin. Unfortunately, this led to conflicts of interest and many abuses in our industry. Investors now enjoy consistent, independent third-party grading of coins by firms whose sole function is to authenticate and grade coins. In the major grading services coins are graded not by an individual grader, but by the consensus of a panel of experts. To protect the integrity of the final, assigned grade, the coins are sealed in tamper-resistant plastic holders that are sonically sealed with an individual certification number and the grade permanently displayed. The two leading independent coin grading firms in the United States are the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC). Both of these firms enjoy an industry-wide acceptance of their grading standards and guarantee both the authenticity and condition of each coin they grade.
Since the introduction of independent third-party grading, rare United States coins have become one of the most liquid of all tangible assets. Coins that have been certified and encapsulated by either PCGS or NGC can be traded on both a “sight-seen” or a “sight-unseen” basis.
Independent certification of coins has also led to the development of several electronic numismatic exchanges. These exchanges link literally hundreds of qualified dealers who, based on the certified grading statement, can provide buy and sell quotes on virtually any certified United States coin. This ease of liquidity is only one of the factors that makes investing in rare United States coins so attractive to today’s collectors and investors.