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Philatelic Investment, the investment of funds in collectible postage stamps for the purpose of realizing a profit, is a relatively recent phenomenon. Stamp collecting has long had the reputation of being an unprofitable hobby for most beginning collectors; nevertheless, investing in stamps is growing in popularity among more advanced collectors. Rare stamps are among the most portable of tangible investments, and are easy to store. They offer an attractive alternative to art, other collectible investments, and precious metals. In addition, for those wary of investing in single-country mutual funds or individual stocks of developing nations, stamps may provide the advanced collector/investor with a means of profiting from their economic growth. 1 Stamps investing
For those interested in investing in stamps (or in any collectible, for that matter), the acquisition of knowledge is the most essential and most valuable investment. Since this endeavor requires a significant outlay in terms of time, although not necessarily money, the prospective philatelic investor is at an advantage if he actually collects stamps, or is a former stamp collector. A stamp investor should have substantial knowledge of classification, condition grading , authentication, handling and storage, stamp dealer s, clubs, auctionAn auction is the process of buying and selling things by offering them up for bid, taking bids, and then selling the item to the highest bidder. In economic theory an auction is a method for determining the value of a commodity that has an undetermined os (including online auctions, such as ebay ), and shows, the stamp marketA market is a mechanism which allows people to trade, normally governed by the theory of supply and demand. Both general and specialised markets, where only one commodity is traded, exist. Markets work by placing many interested sellers in one place, thus, as well as a general knowledge of worldwide stamps and a deeper knowledge of his chosen areas of specialization, among a host of other things too numerous to list. In other words, he should have many years of previous experience as a stamp collector or dealer behind him before embarking on a program of investing in stamps. Philatelic investment is not a game for dilettantes.
2 Commodity
Like all commodities, the value of a stamp is determined by supply and demandsupply and demand model describes how prices vary as a result of a balance between product availability and demand. The graph depicts an increase in demand from D to D along with the consequent increase in price and quantity required to reach a new equili. The factorA factor can be: #a person acting as a mercantile agent #a number that is a divisor of another number in mathematics; #an enzyme in biochemistry. an abbreviation for Functionality, Application domain, Conditions, Technology, Objects, and Responsibility ins which determine a particular stamp's supply are the stamp's printing quantity and the quantityQuantity is a generic term used when referring to the measurement (count, amount) of a scalar, vector, number of items or to some other way of denominating the value of a collection or group of items. It is usually represented as a number (numeric value) of stamps destroyed. Since many collectors prefer to collect unused and un damaged stamps, the quantity used and the quantity damaged also affect collectable supply (since what is considered collectable varies). Printing quantities of stamps are not always available, although some stamp catalogues list printing quantities, when they are known. Quantities used, damaged, or destroyed over time are never known. Generally, the printing quantity, if known, is the only reliable information one has. For this reason, a low printing quantity for a stamp can be an attractive feature for the investor to consider.
3 Demand
Demand for a stamp depends largely on the following factors: the stamp's country (or area) of issuance, topical or thematic appeal, and collectors' or investors' perceptions as to its current or future value. These factors
are summarized as follows:
- Country (or area) of issuance: most stamp collectors within any given country collect their country's stamps; for instance, most American collectors collect U.S, most Swiss collectors collect Switzerland, etc. Some collectors collect areas (such as the Netherlands and Colonies, or British Asia) or regions (such as Latin America).
- Perceptions of value: these influence demand for stamps in the same way that perceptions influence demand in the stock market. Increasingly, the perceptions of collectors/investors as to a stamp's future value play a part, as well.
Given all of this information, how does the investor make a judgment as to whether to focus on a particular stamp? The main questions that the investor should ask are:
- Which countries or collecting areas will experience an increase in demand over the long term?
- Within these collecting areas and given the available knowledge concerning supply (printing quantities), which stamps are undervalued, and should be targeted for investment?
Two types of trends of increasing demand are relevant to philatelic investing: country/regional trends, and topical demand trends.
Country/regional trends are largely dependent upon economic development. Historically, stamps of countries which have experienced long-term economic growth and an expansion of their middle classes have risen in value accordingly.
