INVESTMENT IN PHILATELY – A NEW ASSET CLASS
Interest in stamp investment has increased significantly in recent years. Auction realizations illustrate just how good an investment in stamps or postal history can be, with increasing demand underpinning an active market.
Philatelic investment can be undertaken as an attractive alternative within a balanced portfolio of more traditional investment vehicles with the pleasure of ownership as an additional benefit.
Investment grade stamps are a highly portable, valuable commodity underpinned by a global collector base.
Stamp investors can be broadly divided into three categories.
Pure Investors are simply that: just interested in investments and making money from them. The underlying motivation is purely to see a return on one’s investment. The Pure Investor is unlikely to be interested in the overall aesthetics of the items he is purchasing and will have no need to ‘enjoy them’ through having them available to look at and display. The security of a bank vault may be far more appealing.
Pure Investors may not necessarily engage in direct ownership but invest in the shares of the few listed companies that comprise the philatelic investment market. Their objective is to make money from the increase in demand for investment grade stamps whether owned directly themselves or indirectly via a third party.
Pure Investors are likely to lack market knowledge and will therefore be reliant on others to guide their investment choices.
Somewhere between the Pure Investor and the Stamp Collector comes the Investor/Collector. Here, the objective is to make money but to have fun in doing it, even if it is at the expense of their investment objective.
The art of collecting becomes important, there is a genuine interest is what is acquired and stamps may well be purchased that do not have investment potential but enhance the enjoyment of the activity. Investor/Collectors help underpin the market demand in investment grade stamps and may well find that their collection turns out to be a very inactive investment as their attraction to their portfolio becomes greater than the desire to part with its contents.
Stamp Collectors underpin the market and are the backbone of philately.
Most will have started collecting without a second’s thought as to investment potential. Paramount is the pleasure and enjoyment from the hobby; any incidental gain in value is a happy by-product of the collecting process. Whether the Stamp Collector’s interests lie in collecting a single country, era or theme, they are likely to want to acquire examples that match that objective, irrespective of value and cost. The more expensive items will certainly be harder to acquire and may or may not have investment potential. But that is the not the point: the joy is in the collecting.
Pure Investors are likely to be frowned upon as simply pushing up the price of stamps which may well become unattainable to the Stamp Collector. However, whilst not necessarily having the funds of the Pure Investor, the Stamp Collector invariably has the advantage of knowledge gained through years of study and will be far more able to spot bargains when they occur.
Rudraksh Cap-tech Limited