That story has been downbeat for much of the last decade, as the coin market has suffered through years of decline and drift. But each new year brings a measure of new hope, and optimists--including me--view 1997 as a year with great potential for getting the market off and running again.

Collector-style coins have already built up an impressive head of steam. Lincoln and Indian cents, Buffalo nickels and Bust half dollars have all fared very well in recent years, down to and including circulated grades. And at the other extreme, great rarities have shown that they still have enormous allure--as evidenced most dramatically by the sale of a 1913 Liberty Head nickel for very nearly $1.5 million.

The problem areas lie in between--particularly among coins that became identified closely with investors in the boom years of the Eighties. Many of these are selling for just a small fraction of what they would have brought a decade ago. But one man's bad news is another man's golden opportunity: The current low price levels give today's buyer a chance to pick up huge potential bargains.

On a personal level, 1996 was filled with new chapters for me. The last 12 months witnessed the release of three important Scott A. Travers coin books: "The Coin Collector's Survival Manual," revised third edition; "One-Minute Coin Expert," second edition, and "How to Make Money in Coins Right Now."

"The Coin Collector's Survival Manual" was published by Bonus Books Inc. of Chicago. The other two books were published by House of Collectibles, an imprint of the Ballantine Books division of Random House Inc. of New York City.

Excerpts from all three books have appeared in the pages of COINage. And because all three are so timely--with the ink and information both still fresh--I felt it would be appropriate to use them as the sources in compiling my annual list of the top 12 coins for the next 12 months.

All of the coins in this year's list are highly recommended in the pages of one or more of my three latest books. Many other coins are recommended in the books, as well. But these are 12 that I would place at or near the top of any list.

Here, then, are my 12 for the next 12:

(1) Any coin certified by one of the major grading services during its formative period.

The Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation of America (NGC) both have acknowledged that they were much stricter in grading coins-- especially coins in very high grade levels--during their very earliest months of operation in 1986 and '87. In admitting this to me, David Hall, the founder and president of PCGS, explained that the graders were reluctant--and frankly afraid--to give out grades higher than Mint State-65.

You can identify coins certified during the services' early months by examining the holders in which they're housed. One important feature is the absence of a hologram: The services placed holograms on their holders only later, as a security measure, following a well-publicized incident involving the counterfeiting of early PCGS holders.

If you can locate coins that were certified during those early years, you stand an excellent chance of getting upgrades by cracking them out of the holders and resubmitting them. Your best bet is to stick with premium-quality brilliant coins. With these, you will be almost sure of upgrades much of the time.

(2) Mint State-65 Saint-Gaudens double eagles.

Everyone loves the Saint-Gaudens double eagle. This majestic $20 gold piece is widely viewed as America's most beautiful coin. And that beauty is showcased to maximum advantage in upper Mint State grades such as Mint State-66.

A very substantial price gap exists between the values of "Saints" graded MS-65 and those graded MS-66. In recent months, common-date Saints graded by PCGS have been valued at $1,100 in MS-65 and more than twice that much--$2,300--in MS- 66. Those in NGC holders have been bringing $1,000 in 65 and $2,110 in 66. Thus, you could double your money by cracking a Saint out of an MS-65 holder and getting it upgraded to MS-66 on resubmission.

The downside risk is relatively small: Saints are worth about $700 in MS-64, so the loss in a one-point downgrade would be only a few hundred dollars. And the chances of getting an upgrade are quite good, assuming that you choose a nice premium-quality 65. At the very least, you shouldn't have any trouble getting such a coin regraded as at least a 65.

(3) Premium-quality MS-64 Indian Head $2.50 gold pieces.

Indian Head quarter and half eagles ($2.50 and $5 gold pieces) differ from all other U.S. coins in that their designs are incuse, or sunken below the surface, rather than raised above it. This makes them very difficult to grade--and that, in turn, results in inconsistency by the graders. These coins are much more likely than raised-relief coins to receive different grades the second time around.

What makes this potentially profitable for you is the fact that there is a sizable difference in the market value of Indian quarter eagles between the grades of MS-64 and 65. Common-date Indian $2.50 gold pieces graded by PCGS are valued at $960 in MS-64 and $3,000 in 65. The corresponding prices for NGC-graded specimens are $900 in 64 and $3,200 in 65. The downside risk is about $400 if one of these coins gets regraded as only 63--but the upside potential is more than $2,000, making this an excellent gamble.

After having graded tens of thousands of these coins, the grading services have become more adept at doing so than they were just a few years ago. I would recommend resubmitting any premium-quality MS-64 Indian quarter eagles that were graded originally prior to 1994. After that, the grading became more consistent and accurate.

(4) MS-65 and Proof-65 copper coins.

Copper coins in general, right about across the board, are truly exceptional sleepers. These coins did not participate to any great extent in the market's spectacular boom of the late 1970s and early 1980s, and while major copper rarities have certainly risen in value over the years, their growth has been far more limited than that of similar coins in gold and silver.

I particularly like matte-proof Lincoln cents that have been certified by one of the leading independent grading services as Proof-65 RB (Red and Brown). As this is written, these can be obtained for just $150, and that's an incredible value. They're extremely underrated and very, very difficult to obtain. At $600, matte-proof Lincolns certified as Proof- 65 RD (Red) are also excellent buys. Often, a coin certified as Proof-65 Red and Brown can be resubmitted to a grading service and then will be assigned a new grade of Proof-65 Red, effectively almost quadrupling its market value.

(5) Proof-66 nickel and three-cent pieces, Shield nickels and Liberty Head nickels.

Nickel coins never have enjoyed the same kind of respect as their gold and silver cousins, but often they're rarer-- and should be more valuable--in very high grades and with very sharp strikes. Being a harder metal, nickel doesn't yield crisp design details as readily as gold and silver when struck. And nickel coins are more prone to environmental damage over long periods of time, so fewer survive in pristine levels of preservation.

Surviving populations of 19th-century nickel coins are quite small in Proof-66, and at the height of the coin market's boom in 1989, some of these coins were bringing many thousands of dollars. Today, those same coins change hands for a great deal less. A coin that sold at auction for $8,000 in 1989 might well be available now for less than $1,000. And it's still every bit as rare.

CAUTION: Even though they may have been certified by one of the leading grading services, Proof-66 three-cent nickels, Shield nickels and Liberty Head nickels should be free of carbon spots--that is, intense toning areas which appear to be black. If a coin has any of these spots, you should reject it, no matter how high the grade at which it has been certified.

(6) Franklin half dollars graded Proof-66 or MS-66 or higher.

For several years, knowledgeable coin market insiders, including some of the nation's leading dealers, have been quietly acquiring superbly toned Franklin half dollars in very high grades--Proof-66 or Mint State-66 or above.

You would think that if you went to a coin show and walked from table to table trying to find nice Franklin halves, they'd be plentiful. These are, after all, modern coins--coins produced as recently as 1963. And their mintage levels certainly weren't small, by comparison with previous U.S. half dollars. Judging from their modest value in some of the price guides, you'd probably figure you ought to be able to find hundreds of these coins--maybe even buy them by the bag.

This is not the case, however--for despite their seemingly plentiful mintage figures and despite what any price guides may say, high-grade Franklin halves are surprisingly scarce. And they're just not available in quantity.

While insider dealers are aware of this situation and are seeking to benefit from it, collectors and investors as a whole haven't yet caught on. Thus, while the supply is low, the demand so far has also been relatively low. That has served to hold down the prices, at least on paper. Once additional people start looking for these coins and trying to obtain them, I look for the prices to rise dramatically. And since the present levels are so affordable, making these coins potentially attractive to such a broad spectrum of buyers, the price increase could be amazingly sharp.

(7) Uncirculated silver-clad Eisenhower dollars dated 1973 and 1974.

This recommendation also appeared in my Top 12 list for 1996--and while it didn't come through during the last year, I still consider it valid.

At one point in the 1980s, blue-pack Ikes from 1973 and 1974 were worth $20 or more on the wholesale level. As this is written, they're selling for a mere $2.50 apiece. That's only about a 50-percent premium over their bullion value, for each contains a little more than three-tenths of an ounce of silver. These are highly promotable coins, and it wouldn't take much promotion to drive their price from $2.50 to $6 or more. Those numbers may be small, compared with the fancy premiums commanded by truly rare coins, but percentagewise such an increase would be enormous.

(8) Premium-quality or supergrade coins which have declined in value the most.

During coin market upturns, the highest-quality coins perform the best. During market slumps, they often reach unhear-of lows. Never sell off coins of extreme high quality during unusually depressed market periods. Use these times to acquire MORE high-quality coins.

(9) Bust half dollars graded About Uncirculated-58.

Bust half dollars are perennially popular with collectors and investors alike. Nice Bust halves are always in demand and easy to sell, even in higher circulated grades. For this reason, many have been certified in grade levels from about uncirculated right through the mint-state range, and that has created interesting opportunities for profitable upgrades.

Frequently, an otherwise eye-popping Bust half dollar will be graded only AU-58 because of light rub (or friction) on the high points; the graders will reason that this is evidence of wear, however slight, and that they cannot assign a Mint State grade. At other times, however, the services will give MS grades to attractive Bust halves even if they do exhibit very slight rub. I have even heard of instances where grades as high as Mint State-66 have been given to coins with almost imperceptible--but nonetheless detectable--rub.

I wouldn't expect an upgrade from AU-58 to MS-66, but you'll do quite well even if you get your AU-58 coin upgraded to just MS-62. At this writing, certified Bust halves are worth $200 in AU-58, $500 in MS-62, $1,000 in MS-63 and $1,550 in MS-64. You should look for a coin with attractive, original luster, where the surfaces are beautiful and unimpeded and which is being graded AU-58 only because it has a light rub. That kind of coin could easily be upgraded to MS-62, and might even get a higher grade than that.

(10) Proof war nickels.

In Proof-65, a 1942-P war nickel certified by an independent grading service would cost you about $75 sight- unseen. An extra-nice specimen actually seen before purchase would cost perhaps $350. These are sensational values.

These coins contain silver. They're quite scarce, with a mintage of only 27,600, and a lot of them have deteriorated, making the survivors even scarcer. They're novel--the only proof examples of the war nickel type. Non-collectors appreciate them because of their uniqueness. And, best of all, they're reasonably priced.

(NOTE: Prior to removing nickel from the coin, the Mint also made proof 1942 Jefferson five-cent pieces of the standard copper-nickel composition. A war nickel proof has a large letter "P" above the dome.)

(11) Trade dollars graded Proof-63 or Proof-64.

Trade dollars graded Proof-63 and Proof-64 are sleepers.

There's a gap between the market prices in Proof-64 and Proof-65. As this is written, a Proof-64 example has a fair market value of $2,000, while a Proof-65 is worth $5,000. And the difference in appearance between these two coins is very slight.

I especially like Proof-63 Trade dollars. These are priced right now at only about $1,400 each--and like their Proof-64 counterparts, many appear quite similar to Proof-65 pieces when viewed with the unaided eye. You can get a coin that's virtually identical to a Proof-65 except for a couple of hairlines. And buyers have a tendency to overlook those minuscule hairlines when viewing a coin with great aesthetic appeal. You're getting a coin with almost the same eye appeal for only about one-fifth the price.

Be on the lookout for Trade dollars which have been certified as Proof-63 by one of the leading independent grading services. Many of these coins can be taken out of their holders and sold at a later time for a higher price.

CAUTION: Be careful in purchasing "raw" (or uncertified) proof Trade dollars. Many of these coins have been certified and encapsulated and then removed from their plastic holders because their owners felt the assigned grades were too low. You may be misled into grading such a coin optimistically and thus paying too much for it.

(12) Premium-quality coins.

Coins of premium quality are priced at historic lows.

Back in the late 1980s, PQ coins were priced in some cases at 40 to 60 percent above the levels of standard-quality coins of the same types. Today, by contrast, PQ coins are priced at just 40 to 60 DOLLARS above the prices of their ordinary counterparts.

This creates a tremendous buying opportunity: For little or no additional cost above the price of a standard-quality coin, you can obtain a coin that's clearly more desirable. And in many cases, you have a great shot of resubmitting such coins and getting them upgraded to the next-higher level, thereby increasing their market value considerably.