Editor's note: The following post is part of Coin World's "7 lessons in collecting" series. Find links to the other posts at the bottom of this page. 

Investing in rare coins is not easy. It takes dedication to learn various aspects of coin collecting that are always changing: supply, demand, rarity, grading, and understanding how to maximize value when buying and selling. These are skills that take years, if not a lifetime, to master. 

Thankfully plenty of helpful resources exist in the coin field to help collectors willing to put in the legwork to maximize the investment return on their collection, including a new book by Robert W. Shippee recently published by Whitman, titled Pleasure and Profit. In it, Shippee discusses his pursuit over the course of more than a decade to put together a type set of each major design type from copper half cents to gold $20 double eagles, from 1793 to the present day. It’s a frank, candid tome filled with anecdotes that collectors can learn from. 

Lesson No. 3: Learn how to grade

Grading in today’s market assigns a number that serves as shorthand to describe a coin’s wear, eye appeal, and various other factors. Just like diamonds have the “Four C’s” — cut, clarity, color and carat, some key factors should be considered for coins. 

First is wear, which separates a circulated coin (Poor 1 to About Uncirculated 58) from a Mint State one (MS-60 to MS-70). 

Luster is a key component of Mint State coins, and it can be present in protected design areas on coins with wear. 

Strike refers to how well a coin was struck (and is especially important on coins with notoriously weak strikes, such as Standing Liberty quarter dollars). 

Eye appeal is what distinguishes market grading from technical grading. A coin with eye appeal is an attractive coin and toning plays a part in this. Toning is the result of a coin interacting with its environment and the results can be spectacular, as seen on some rainbow-toned Morgan dollars, or it can be detrimental, such as the spotted, mottled toning that is occasionally seen on Barber dimes, quarter dollars and half dollars and some commemorative issues. 

Shippee advises collectors to train their eyes to determine what is attractive toning and what constitutes good eye appeal. He warns: “Coins with unattractive toning are almost always priced below equivalent examples that sport average or attractive toning. Don’t be tempted—the savings are almost guaranteed to be illusory. You won’t enjoy owning an ugly coin, and you are very unlikely to make any money when it comes time to sell.”

The lot viewing that takes place at nearly all major conventions is a great place to see many different coins and to learn grading. Shippee agrees, writing, “These free events are a perfect way to see many coins, hone your grading skills, compare actual coins to the photographs appearing in the catalog, and learn from the auction-firm representatives and dealers in the room. Even if you’re not intending to bid on any coins in the auction, it is instructive and fun to go to the lot viewing.” 

As a cautionary note, collectors need to look out for some things even when buying coins that have been certified by leading third-party grading services. Looking at a lot of coins can help a collector understand original surfaces, but Shippee warns to not assume that the grade opinion of one grading service will be shared by another service.

More from the "7 lessons in collecting" series:

• Lesson No. 1: Invest in education first
• Lesson No. 2: Understand that mistakes happen
• Lesson No. 3: Learn how to grade coins
• Lessong No. 4: Quality and rarity don't go out of style
• Lesson No. 5: Understand supply and demand to find value
• Lesson No. 6: Look for special coins and stretch for them
• Lesson No. 7: Understand how to work with dealers

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