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Through the mid-1980's,
rare coin prices were determined by 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.
These grading services now employ precise industry-wide accepted grading
systems. In addition, coins are graded not by an individual grader,
but by the consensus of a panel of experts. To protect the integrity
of the 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 industy-wide acceptance of their
grading standards and guarantee both the authenticity and condition
of each coin that 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
staement, 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 buyers.
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