The following Q&A is excerpted from Clifford Mishler’s Coins: Questions & Answers, 5th edition:
Q: I have often been told that when buying a given coin, one should always buy an example of the best quality available, but I am wondering if there is valid justification for paying a multiple of 10 times more for an MS-65 (Select) than for an MS-63 (Uncirculated with attractive eye appeal), or a like multiple for an MS-67 (Gem) over an MS-65.
A: The practice of buying the best quality available is certainly an appropriate and applicable rule . . . up to a point. Let’s assess, for example, an 1892 or 1893 World’s Columbian Exposition commemorative half dollar. In “Select” quality, these coins today carry a value of approximately $800, but 20 years ago they traded for about $1,000. Stepping up to “Gem” quality, today the price is in excess of $10,000. While the best-reported grade for specimens of either date is MS-67, hundreds of examples of each exist at or above the MS-65 grade level. Referred to in the trade as “ultra-high” grades, with only the most minuscule difference between specimens, it is questionable that they would be worth that amount from the collector perspective. Rather, this is a speculator market, where the demand support is very thin. The market is much more broadly supported at the MS-63 level, where either coin carries $100 level price tags, at which one could acquire perhaps eight to ten, or perhaps even more examples that would be more readily marketable. The Columbian issue is, however, a very common issue within the classic commemoratives series (1892–1954). Assessing where one might direct their monies when price appreciation is an objective, you should buy coins that are basically scarce and numismatically desirable, that are possessed of a broad base of collector interest, always buying high-quality specimens, but avoiding the ultra-high grades.
Q: What types of coins are best to buy for investment?
A: Supply and demand are the dominant persuasions of the marketplace. In the world of coins, the demand is expressed in two ways. First, the demand of type; there is a greater demand for the relatively common Lincoln cent than for scarce Byzantine bronze. Within the desired type, the demand is greatest for the coins of lower mintage and higher grade. Supply is meaningless unless there is a demand for the type; an 800-plus-year-old denier of Richard the Lionheart can be purchased for a low two-figure expenditure. Over the years, the higher grades of the lowest-mintage coins within a demand type have proven to be the soundest investment.