The grading of rare coins is simple if they are sent to The Professional Coin Grading Service (PCGS) for independent certification. Once graded by PCGS the value of each coin can be easily figured using the Certified Coin Exchange or a number of trade journals.

To understand price the investor must learn the relationship between condition and rarity. This grading approach was developed in the 1950s by Dr. Sheldon who was writing a book on early large cents. His system would eventually be adopted by everyone and used to numerically describe the condition of coins, which in turn would define the coin's selling price.

The Sheldon Grading Scale, as it finally came to be known, begins at 1, which describes a barely recognizable coin and proceeds to 70, which describes a theoretically perfect coin. Most coins are circulated and fall somewhere between Very Good (VG-8) and Almost Uncirculated (AU-50). As you move up the scale the coin improves in condition and is worth more money. Coins showing no wear are called Uncirculated or Mint State, as the terms are used interchangeably, and are rated MS-60. The scale then proceeds in increments of one point per grade so you will find Mint State coins which are MS-61, MS-62, MS-63, MS-64, MS-65, MS-66 and so on through MS-70. Each point increment describes a progressively more beautiful coin and therefore one that is worth more money. Most uncirculated coins fall somewhere between MS-60 and MS-66. Grades above MS-66 are rarely encountered.

As a coin moves up the scale it becomes more difficult to locate. The higher the grade the fewer the coins which qualify. This is so because most coinage was simply used for its intended purpose. It was spent and became used or circulated. This process eliminated the mint state condition of most coinage in short order. The investor's search for higher grade examples is what drives prices higher and in turn shrinks the available supply.

PCGS is independent of any dealer and is the finest grading authority known. This provides the investment market what it needed most. The answer to grading inconsistencies. Because PCGS uses only "world-class" graders it is easy to receive buy and sell prices right over the phone. And so market liquidity and consumer confidence are assured.

In today's world, collectors and investors have always wanted coins in higher grades. And they have paid more for these choice examples. Why? Because their grade or condition made them rare relative to other examples. A study of rare coin prices will clearly show coins in better condition have appreciated faster and consistently brought higher prices in rising markets.