Do I have to Buy the Best Quality Coins to Make Money?

Buy quality! Buy quality! Buy quality! That's all you hears these days when you are considering rare coins as an investment. First, are you really buying coins as an investment, or merely for the pleasure of owning a piece of history? That is sometimes the real dilemma for many collectors, or is it investors? Everybody wants to make sure that their investment is protected, but there are no guarantees, especially in rare coins. In fact, some rare coins take years to appreciate to the point of being able to sell it profitably.

Hey, I would love to be able to plunk down $100,000 for a 1919-s Standing Liberty Quarter in MS67 condition certified by PCGS. There is only one coin with this date certified by PCGS as of February 7th so it is the finest available. But not many of us have that luxury. I don't, and I suspect you do not either. It's hard to comprehend paying more for a single coin than my first house cost. And while the rarest and finest of all rare coins have reached stratospheric prices, what does this leave the rest of us? Not much, unless you are willing to do a little work.

So if my interest is in rare coins as an investment, what do I do? Well, there are many other coins and options you can choose. First, let's review what drives the price of a coin.

1. Demand. Demand perhaps is the biggest driver of price. A clear example of this is the 1909 S VDB with a mintage of 484,000 and an estimated retail value of $720.00 in G4 and $7,500 in MS65 vs. an 1879 Shield Nickel. The Shield Nickel had a mintage of only 29,100 yet the estimated retail value of a G4 is only $415 while the MS65 example is $1,950. To further illustrate this point, PCGS has certified 703 MS65 Red 1909 S VDB cents and only 27 MS65 Shield Nickels. How many Shield Nickel collectors do you know vs. Lincoln Cent collectors?
2. Scarcity. Generally speaking, putting demand aside, the more scare/rare a coin, the higher its value. This is usually very true, especially when comparing dates within the same series. Scarcity should not be confused with overall mintage. During the silver booms, many, many silver coins were melted for there bullion content. Additionally, some coins with higher mintages can be quite rare in certain grades such as higher MS condition coins due to weak strikes, etc.
3. Condition. This is the most obvious one. When comparing the same coin, the better the grade, the higher its value.
4. Age. Although age can have some factor, I would rate it lower than the three above

Ok then, considering all these factors, how do I find nice coins that I can afford that will not only appreciate in value, but appreciate at a higher rate than other coins? I think the key word here is