What would you do if someone asked you to invest $100,000 in stamps for them?
It’s an intriguing question, isn’t it?
In late December, I was reviewing new messages in one of my personal e-mail accounts.
One of the missives was an alert from LinkedIn, the successful networking website for professionals.
Specifically, the notice concerned a new post in the “American Stamp Dealers and Collectors” group, which I follow on LinkedIn.
“One client [h]as asked me to invest $100,000 in stamps,” began the poster, a “Top Contributor” to LinkedIn, with “4,000+ LinkedIn Connections,” according to the website.
“The goal is for the stamps to be worth $120,000 five years from now,” he states.
He then posed a number of questions, to stimulate other LinkedIn viewers to comment.
His first question was the most obvious: What should I buy?
He provides a partial answer: “Some areas such as China, India and other Asian countries, high quality classic [United States], better British Commonwealth seem to be doing well.”
From my perspective as the editor of the Scott catalogs, that assessment is largely correct.
There has been some softening of late in the China market, but better quality material, particularly rarities, continues to set records at auction.
In the U.S. stamp market, activity is rather flat. But exceptional stamps and postal history from the classic period are precipitating significant competition among collectors, both in retail and auction transactions.
Prices and auction realizations for stamps grading 98 (extra fine to superb) or better are on the rise. This is especially true for used stamps, where top quality examples are exceedingly difficult to find.
“Can I find one lot of good British Commonwealth sets for $50,000 and another lot of mint [People’s Republic of China] for $50,000 ... ?” the poster continued.
An answer to this question depends a great deal on how long you are willing to look.
While a definition of “good” can vary widely, the context of the poster’s comments suggests he is looking for stamps in excellent condition for his client.
Therefore, he is not likely to find intact lots of better quality stamps.
Dealers and auction houses prefer to offer standout stamps and sets individually. So our poster would get a better return for his client by acquiring items one at a time.
This approach will cost more up front, but the potential for a more substantial payback is greater.
As of Dec. 30, the post “Looking at investing $100,000 in stamps for an investor/collector. What should I buy?” had attracted seven responses.
One was from a dealer who provided a link to a collection offered on eBay for $275,000.
The lot description states the collection is the “finest, rarest, and most sought after investment grade stamps together in an investment portfolio worth well over $½ million dollars!”
My advice? Be wary of such strings of superlatives.
A sage recommendation came from another respondent.
“If I had $100,000 I would not be putting it in stamps for any reason other than ‘collecting enjoyment,’ ” he wrote. “Not just because the hobby seems to have fewer and fewer ‘serious’ participants each year, but because the WAY people collect stamps is changing considerably as new people come to the hobby.
“In other words, the paradigm of the past will not necessarily result in positive gains for the future.
“In a very general sense, material from the emerging economies in Asia might be your best bet, given that stamps are rather a ‘luxury hobby’ and as personal incomes in those areas continue to grow, so is demand for collectible stamps likely to grow.
“On the whole, though ... not something I’d be wanting to undertake.”
The “something” here is investing in stamps.
Yes, it is possible to invest in stamps and make money doing so.
You need, first and foremost, both the means (finances) and inclination (desire and drive) to do so.
Also required are discipline and patience to seek out the very best items you can afford and acquire them when they become available.
Finally, you need the philatelic knowledge to buy intelligently. If you don’t have it, find an experienced collector or dealer to mentor you.
Leaving all this aside, the best guidance is this: Collect what you want and enjoy what you collect. That will give you the best payback during your years of collecting.
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