Gold and Silver Mine

Most people who start coin collections, myself included, begin by purchasing one of those folders that have holes for all the dates and mints where you insert the coins found in pocket change or while going through coins given by relatives. Ultimately, unless you are very lucky, there will be some coins that just are elusive and can’t be found that way. To continue your collection, it is sometimes necessary to purchase some of the missing coins, either by going to coin shops or visiting coin shows. These purchases can be modest at first, but can escalate when some of the last holes in the folder remain open.

The last coins needed to finish a set of coins typically have the lowest mintage figures and are known as semi-keys and keys, the term “key” referring to the fact that they are the key to finishing the set. Because some of these key and semi-key coins can have a modest to expensive price tag, many collections are missing those coins.

A different way to collect, and actually it could be considered investing rather than collecting, is to accumulate only the “keys” of a set of coins. Don’t bother with the folder, just purchase the coins that are missing in most collections. The way to approach this is to select the rarest coin in each series and to plan on buying a coin that is at least “fine” condition. A coin in fine condition is midgrade; it has wear, but most of the detail is visible. Look at the price of the coin you considering purchasing in fine condition, and then check to see if a higher grade coin could be obtained for only a little more money.

For an example, I’ll start with the Lincoln cent series of coins that were first minted in 1909. In 1909, the 1 cent coins were struck in the Philadelphia and San Francisco mints. Initially the coins were meant to have the designer's initials (V.D.B. for Victor D. Brenner) on the reverse side at 6 o’clock near the rim. There was a lot of opposition to this, so the coin was redesigned with the initials removed. The San Francisco Mint produced fewer than half a million coins with “V.D.B” on the reverse, whereas millions were struck without the initials, so this coin is the key to the cent collection.

Now, what grade coin to purchase? A 1909-S VDB 1 cent coin in fine condition will cost in the vicinity of $625 to $650 whereas the next highest grade, very fine, will run a little over 10 percent more, so I would opt for the next grade. Some collectors with more financial backing could look at the price of an uncirculated specimen, which is priced at about double the coin graded fine, and feel it would be a better investment to purchase the higher-grade coin.

Since most collectors have limited resources, I would suggest sticking to the approach of buying a higher-graded coin than one in fine condition only if the difference in price for the next higher grade is in the 10 percent to 15 percent range.

When buying these coins, only purchase ones that have been graded by the Professional Coin Grading Service or the Numismatic Guaranty Corporation to avoid disappointment later.

The 1909-S VDB Lincoln cent is my first choice, but I will share other suggestions in my next column. Putting together a collection of key coins can be challenging but very rewarding, as these coins typically rise in value over the years.

Douglas Keefe is the president of Beachcomber Coins Inc. He and his wife, Linda, operate Beachcomber Coins and Collectibles, formerly in the Shore Mall and now at 6692 Black Horse Pike in the old Wawa building just beyond the former Cardiff Circle. They have satellite offices in Brigantine and Absecon. Between them they have more than 70 years of experience in the coin and precious metals business. They are members of the American Numismatic Association, the Industry Council of Tangible Assets, the Numismatic Guarantee Corporation, the Certified Coin Exchange and the Professional Coin Grading Service.

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