Jeff Garrett: The Case for "Key Date" Coins

Choosing which coin series to collect is one of the first challenges facing those new to the hobby. There are dozens to choose from, and if you include world and ancient coins, the options become nearly endless. Untold numbers of new collectors have started over the years by filling coin boards and albums. Perhaps one of these started you on your numismatic journey. Mine began with a simple Whitman folder of Lincoln Cents from 1941 to date. This was around 1970.

Today, new collectors are inspired by the mass market sales of US Silver Eagles and other modern coins. The vast sums spent marketing these coins to those who might be interested in collecting is a huge driver for growing the hobby. Like those who started with a Whitman folder, modern coin buyers often turn their attention to more advanced numismatic pursuits. This is where it gets tricky for new collectors.

2016 Silver Eagle from NGC Coin Explorer Click images to enlarge.

For many, the natural progression is to move to earlier series of what they now collect. Some will decide to collect a complete set of Lincoln cents 1909 to date. Many of the Silver Eagle buyers will turn to Morgan and Peace dollars dated 1878-1935. Regardless of what they collect, they will then need to decide which grade range of coins to pursue. This is usually a function of budget. Buying the best grades you can afford is still age-old advice that has withstood the test of time.

As we have discussed many times in these articles, set registry collecting is a huge driver for the hobby. Apparently, collectors love competing with one another. Pride of ownership is taken to a new level in these heated competitions. Finest-known examples of even the most common coins can bring astounding prices. In the long term, this can be a risky way to collect coins. Today’s finest-known coins can be eclipsed by a new discovery, or one of the competitive buyers may drop out.

From a mathematical perspective, collecting “Key Date” coinage of any series is something that should be considered. Key Date coins are defined as the handful of rarest coins for any given series. The 1909-S VDB Cent is a classic example. It’s the rarest and most expensive Lincoln Cent in circulated condition, and even low-grade examples sell for about $1,000.

1909-S VDB Lincoln Cent from NGC Coin Explorer Click images to enlarge.

The supply of Key Date coins such as 1909-S VDB Cents, 1916-D Dimes, 1916 Standing Quarters, 1921-PDS Half Dollars and 1893-S Silver Dollars are basically fixed and limited. Rarely do enough new examples show up and disrupt demand. As the hobby grows over time, the demand will only increase for these rare coins. The limited supply caused by very low mintages will ensure the focus of serious collectors well into the future. Buying the best grades you can afford still applies but is somewhat less important. There will be demand for Key Date coins at all grade levels in most cases.

The following points support the idea of buying Key Date coins:

1. Collectors will always need the key coins of any series to complete sets. This will ensure demand for these issues for as long as people collect coins. Rare and scarce issues of any series from around the world will always be in demand. Many collectors seeking extreme quality have ignored key dates in average condition.
2. Rare issues will always be rare. In most cases, it is extremely unusual for hoards or mini-hoards to show up of rare dates for most series.
3. Nearly every series has coins that can be considered true rarities. This offers opportunities for collectors to do research to identify undervalued coins within each denomination or series. The rare and scarce coinage of some countries are all now undervalued.
4. Most truly rare coins have great stories attached to them, and this makes them much more interesting to collect. Who would not love the story of an 1856 Flying Eagle Cent? These stories are what making coin collecting a great hobby.
5. Buying Key Date coins still requires attention to quality for the grade. Buyers of these rare issues can sometimes be even more fussy than those simply filling holes in their sets. Eye appeal is extremely important when buying expensive coins. When it’s time to sell, buyers will be less concerned about price and more concerned about quality. This holds true for every grade from About Good to Gem Uncirculated.
6. Check the price history for Key Date coins for most series, and you will be very surprised by how well they have performed over the years. I like to think of these coins as the “Blue Chips” of numismatics. They will always be in demand and rarely fall.

Remember, the strategy outlined above holds true for world and ancient coins as well. Many of these coins are just now getting the attention they deserve. When considering how to spend your hard-earned money in numismatics, I highly recommend that you consider rarity as one of your first priorities. Many of the coins have great value at today’s prices, and you will enjoy the pursuit! 

Recommended reading:

100 Greatest U.S. Coins by Jeff Garrett and Ron Guth
Whitman Publishing

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