A good investment is one which delivers an attractive rate of return over a long period of time, much like one’s home. Since the universe of postage stamps numbers over one million, one needs to make some value judgements to prevent our investor from becoming a stamp collector as an unintended consequence. Parsing the stamp universe between collectible and investable stamps is a critical first step. This becomes even more challenging when one considers that every stamp exists in both a mint (unused) and used. Hence, you have more than two million choices. Less than 2% of this stamp universe qualifies for consideration as investments and, while both mint and used may meet the value cutoff, their rates of appreciation will often be significantly different.
In 2020, after decades of detailed research of postage stamp price appreciation, I published a book titled “Money Stamps – The Safe-Haven Investment In An Unsafe World”. The book cites some compelling statistics on the appreciation performance of some 25,000 stamps in a select database of investment caliber stamps. It showed 25-year appreciation of 238% or 9.5% a year for mint stamps and 183% or 7.3% for used stamps. The stamps included in this database had a current catalog value of $25 or more and were issued before 1950. In order to differentiate the stamps further, a five-star rating system was assigned to each stamp based on 1% to 5% annual appreciation with 5 stars signifying 5% or more, much more given the aggregate appreciation numbers. A negative star (*) is also assigned for things to avoid. Stamps are also looked at by country of issue since collector popularity and number of participants plays a significant role. For example, United States stamps ranked number 1 in used stamps with 538 items showing an average 25 -year appreciation of 906.7% but was ranked as number 10 for its mint stamps with only a 373.9% appreciation rate (Italy came in first with 791.1%). Note I am citing the 25 year rate rather than, say, the last 5 years for a reason. Global stamp catalogs don’t re-evaluate their pricing on all countries each year. Even waiting more than 5 years is common given the huge number of items. Hence, when updates are made, they may reflect up to five or ten years of time since the previous update and thus are often dramatic. There is a workaround to this but let’s leave getting into the weeds for now.
The important thing to take away from this article is that as an investor, you want to be agnostic in your stamp selection and focus on provenance and appreciation much as a stock investor focuses on an industry and past performance. Note that the full selection of investment grade stamps and their ratings is available for free on my website www.stampfinder.com. You need a large universe of stamps to select from because the higher a stamp’s rating, the harder it will be to find.
In my next Part 3 I will focus on some of the difficulties an investment buyer faces and examples of past recommendations and how they fared.
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