Have you every gotten a shiny new penny in your change? It’s noticeable because it looks so very different than the penny you might find under your couch cushion during spring cleaning. The condition of a coin is called its “grade” in the numismatics world. Grading is subjective art and crucially important in terms of the value of a coin.

Official Grading Standards:

Coin grades range from the possible perfection of proof and Brilliant Uncirculated to the worn conditions of Good or About Good. (I know it’s odd that Good is a low grade in terms of coins, but these are official terms used by the American Numismatic Association.)

Just like in real estate, where the key is “location, location, location,” in numismatics what is important is “grading, grading, grading.” Here’s a handy chart to help you get started learning about grades.

Pricing and Grade:

Most coins are available in a variety of conditions and many collectors struggle with decisions on what grade coins to acquire. Generally, the better condition a coin is in, the more it will cost. Therefore, budget limitations often keep us from having the quality we most desire.

Many collectible coins have a “double dynamic” of value when they carry both precious metal content and numismatic interest. Keep in mind that pieces with intrinsic metal value will always retain that worth, regardless of their grade. (Note: precious metal markets can be volatile.)

Making a Choice:

Deciding on what grade coins to invest in might depend on why you’re a coin collector to begin with. There are many reasons to collect coins including preserving history, a love of art, investment potential and thrill of the chase.

Brilliant Uncirculated coins, which have never been used in commerce, are beautiful and might best highlight the artistic designs. On the other hand, circulated coins can have a special attraction of their own as their wear and tear can put you in mind of where the coin might have been and who might have used it. Personally, I love holding an historic bit of coinage and imagining the stories it might tell!

Where to Go From Here:

My advice to collectors is always to find a coin series you love and start with what you can afford in terms of grade. You can always replace pieces with higher grade examples as your budget grows. At that point, you can put those previously purchased circulated pieces back into the marketplace for the next batch of new collectors to enjoy!