Is it worth buying raw coins and hoping for a high grade?

Is it worth buying raw coins and hoping for a high grade?

Is it worth buying raw coins and hoping for a high grade?

The decision whether to buy ungraded/raw coins with the hope of a high grade from an independent certification service like NGC or PCGS is complex and requires a careful assessment of the risks and rewards.

Potential benefits:

  • Financial gain: If the ungraded coin receives a high rating from an independent certification service, its value can be significantly higher than the purchase price. This can be lucrative for experienced collectors with a trained eye for quality.
  • Discovery and rarity: Discovering a hidden rarity can be very exciting. One might find a rare variant or an unknown minting error that can significantly increase the value of the coin.

Challenges and risks:

  • Grading costs: Even if the coin appears to have a high grade in its raw state, there is no guarantee that it will receive the same grade from the certification service. The costs of grading can be high, especially for valuable coins.
  • Market saturation: The market is oversaturated with ungraded coins, making it difficult to find truly undergraded, high-quality examples. Many collectors are already pursuing this strategy, which increases competition.
  • Expertise Required: Accurately assessing a coin’s potential grade requires extensive knowledge of grading standards, coin mintage, and wear patterns. Beginners could easily overestimate a coin’s condition.

Recommendations:

  • Prioritizing Certified Coins: If your primary goal is an investment or a guaranteed grade, consider purchasing coins that have already been certified by a reputable third-party certification service.
  • Developing Grading Skills: If you want to take on the challenge of identifying potentially high-quality ungraded coins, you should invest time studying grading standards and comparing coins to published photographs. Join numismatic forums or clubs to learn from experienced collectors.
  • Focus on specific collecting areas: Focus on collecting areas where ungraded coins with high potential for high grades are more common. For example, coin sets or certain historical series may offer better odds.
  • Weighing the benefits and risks: Weigh the potential financial gain of a higher grade by an independent certification service against the risk that the coin will not achieve the desired grade and consider the associated certification costs.

Result:

Ultimately, the decision depends on the individual collector’s goals, budget and numismatic expertise. For beginners, it may be a safer option to start with coins that are already certified and expand their grading knowledge over time.

Further reading: To help you decide whether to buy ungraded coins and hope for a high grade, we have put together some further reading materials here:

Getting started in gold coin collecting: considerations, uncertainties, and benefits.

The Importance of Coin Certification