A Great Article With Some Wisdom (Highlighted)

Circulated coins in strong demand across the board
10/3/2005
By Mark Ferguson
COIN VALUES Market Analyst

As average collectors are being drawn into the coin collecting hobby, they're discovering coins not currently seen in circulation, such as 2- and 3-cent coins, Shield and Liberty Head 5-cent coins, the Seated Liberty and Barber silver coins, and many others of various series and denominations. Most of these coins are quite affordable in circulated grades, except for some of the major key dates, such as the 1916-D Winged Liberty Head (Mercury) dime, the 1901-S and 1913-S Barber quarter dollars, or the 1921 Walking Liberty half dollars from the Philadelphia, Denver and San Francisco Mints, for example.

Some experienced collectors and dealers recommend purchasing such keys first, because their prices keep steadily escalating. However, while it may be smart to go after the key coins early on for this reason, it may also be prudent to get your feet wet first by buying more common coins of a series to learn about various nuances characteristic to each series. Some things to be cognizant of are striking characteristics of the design type you prefer, grading and varieties.

Because many of these circulated coins are relatively inexpensive, most of them have not been graded by professional third-party grading services. Several grading guides are available for sale on the market to help you learn how to grade various series. Unfortunately, there are also a few pitfalls you need to be aware of, like artificially added Mint marks, improper cleaning and counterfeits. While such problems are not overly common, you should be aware of them, and deal with people you can trust or have recourse with.

Beware of extreme bargain prices for these reasons. However, if you want to act as your own "dealer" you can find great bargains in Internet trading, at coin shows and in trading ads in Coin World's classified advertising section, the weekly publication produced by the owners of Coin Values. Remember that the values published in Coin Values are retail values, i.e., prices you'd expect to pay a dealer. Be aware that there is also a wholesale market, which is dealer-to-dealer trading, allowing price spreads for dealer markups in order for them to cover business overhead and profits.

Additionally, building a collection of circulated coins has become much more challenging during the past few years because of the increased demand and lack of supply available on the market. Dealers who represent collectors in the marketplace with want lists are having a difficult time finding the right coins for their customers, and some dealers have even cut back on offering want list service because is it so time consuming, producing limited results. Instead, these dealers are just buying and selling what comes their way - in their shops, at shows and in buying bulk lots of circulated coins in auctions.

When you find a dealer you like - who is willing to search for coins for your want list at shows and over dealer trading networks - don't "nickel and dime" that person. A dealer really can't scour a bourse floor, taking a couple of hours to find a $100 coin for example, and make just $10 or $20 on it. That's the situation especially after paying for a plane ticket or high gasoline prices, hotel bills, bourse table fees and other business costs to be there, in addition to covering business costs at home that may include advertising, dealer trading network connections, shop rent and insurance.

If you find a dealer you like, stick with him or her and pay the price asked. If you constantly try to chisel on price, you'll probably find that, eventually, you'll be asked to pay higher prices, as the dealer will learn to expect your frequent chiseling and will raise prices. On the other hand, if you're fair with a dealer, you'll probably get better service and prices.

In the long run, the trend for values of circulated coins is steadily rising. There is no reason to believe these values will soften.

While you may find bargains, be wary of buying coins with defects that stand out. Improper cleaning, scratches, rim dings, spots and similar problems should be discounted. Values listed in Coin Values are for strictly graded, problem-free coins. The coins with extra pizzazz should sell for premiums.

Market demand for circulated coins is accelerating and destined to only get stronger, causing steadily higher values in virtually every series and grade during future years. Learning how to grade coins for yourself should be imperative, and building a finely matched collection of circulated coins will be a proud accomplishment, one that should pay financial rewards, as well as bring great personal satisfaction.