Investment in Stamps

A Golden Opportunity
 Why invest in stamps
 Should we invest solely in Indian stamps
 Investment in Mint vs. Used Stamps
 Investment in rare classic stamps
 Collector vs. Investor profile
 Investment cycles
 Where do we normally invest?
 Investment in collectibles
 Types of Stamps
 Postal Stationery
 Other things to consider when purchasing stamps
 Facts about Philately
 Things to consider when selling stamps
 Other types of new Stamps
These days, stamps are considered as an
alternative investment. Stamp possess
considerable aesthetic qualities and there is
also psychological appeal of something
tangible, rather than figures in the bank, pass
books or demat accounts
 A world of opportunity opens up when you start to
learn about a stamp. Philately is one of the more
interesting and educational hobbies as it teaches us
about history, geography, politics, art & culture, all
insides the borders of a postage stamp. It trains our
power of observation, improves our perception
broadens our view and adds to our knowledge of
many field of learning.
 Stamp collecting today is the world’s oldest and
most widely followed hobby. It is also one of the
very few hobbies which has acquired authentic
status and enjoys extensive government support.
 The introduction of the postage stamp and its
popularity gave rise to an interest in philately and
birth of the philatelist . The history is as old as the
history of the postage stamp itself
 Stamp collecting or ‘Philately’ is one of those
timeless hobbies that might have been enjoyed by
your grandfather and could be a past time for your
grandchildren. Stamp collecting is far more
compelling than just the removal of the paper from
the back of the back of the stamp
 Philately is the second most popular hobby in
the world after Football
 Ten Billion US$ Market of global philately
 48 Million philatelists exist worldwide
 18 million philatelists in China alone
 India Post issue approximately 800 Cr. Worth

of stamps and philatelic material every year

(at least since last 5 years)
 Almost 12 lacs philatelists exist in India
 Bank savings account – 10,000
 Fixed deposits / recurring deposits – 10,000
 Lending out to market - 20,000
 Mutual funds – 50,000
 Shares, stocks & commodities - 50,000
 Land and real estate - 5,00,000
 Gold, Silver other precious metals – 1,00,000
 Investment in collectibles - 100
 Antique goods – 1,00,000
 Coins and Currency

◦ New @ premium rate – 1,000

◦ Old @ Market value – 10,000
 Stamps
◦ New Stamps - 100
◦ Rare classics – 15,000
 Art and Paintings -50,000
 Low cost of investment
 Relatively confidential investment
 No risk of capital loss, always retains face

value
 Government regulated investment
 Low space requirement
 Highly portable – tangible asset
 Minimal risk of theft
 Finite supply of stamps
 Readily available from Post office (Philatelic
Bureau) at Face value
 Specific details easily available from the P.O
 No detailed research required
 Foreign stamps attract other factors

Postage & Shipping costs

FX rates – currency fluctuation
Risk of theft/ damage in transit
Environmental conditions for mint stamps
 Stamps are not highly correlated with other forms of
investment and may represent a valuable
diversification within a wider portfolio.
 Stamps are highly portable stores of wealth and are

easily transported over national borders.

 An ageing population in western countries means

that investors approaching retirement may resume

childhood hobbies.
 There
are million of enthusiastic stamp collectors
around the world creating a global marketplace.
 There is a finite supply of classic/ mint stamps.
 Stamps are not a financial asset and so may perform
better than cash in times of high inflation.
 As a tangible asset, a stamp cannot go out of business
like a company quoted on the stock market.
 Stamps are a relatively confidential investment. Unless
bought at a public auction, ownership is private and
there is no public register as there is for many
investments in equities.
 The investor is able to hold and admire his investment,
and enjoy its aesthetic aspects.
 Many stamps have an interesting historical background.
 There is no right or wrong investment
 For investment purpose Mint is preferred
 Used stamps are more hobby oriented
 Mint stamps are investment oriented
 Conditions of stamp differ in used stamps
 Mint stamps are always MINT
 Used stamps usually have slow price incline
 Mint stamps have sharper incline in value
 Knowledge and research required for
collecting a rare classic stamp
 Average time required for gauging fair
market value is 2-4 years
◦ Relationship with philatelic fraternity
◦ Regular web based research
◦ Visits to Public auctions and exhibitions
◦ Magazines & catalogues
 Classic stamps have slow incline in value
 Collected as a prestige item in collection and
for mental satisfaction
 The genuine commercial covers, correctly
franked and postmarked and perhaps bearing
other transit Postmarks showing their
passage across the world, will always
demand a considerable premium over the
single used or mint stamps in such cases.
 Commemorative stamps
 Definitive stamps
 Service stamps

Which of these are suitable for

Investment?
 Sheet
 Se - Tenant
 Sheetlet
 Miniature Sheet

Which of these are more

suitable for Investment ?
 All of the above
 Healthy growth in value in short time
 More attractive than normal stamps
 Prepaid Postal envelope
 Inland letter
 Aerogram letter
 Post card
 Registered envelope
 Meghdoot postcard

Should we invest in these ?

 FDC - First Day Covers
with special cancellation
 Information Brochure
 Special Folder
 Special Cover
 Booklet
 Maxim Card
 Others

Should we invest in these ?

Unlike stocks and shares, the majority of transaction in the
philatelic or stamp market take place informally, by mail order or
in retail environments, and therefore the size of the market is
hard to determine. The market is certainly much smaller than the
financial markets but it is not trivial. It has been estimated at £5
Billion.[4] The majority of these transaction, however, are likely
to be low value item rather than investment. In a 2007 interview,
Mike Hall of Stanly Gibbons estimated that “About $1 billion of
rare stamps trade annually in the $10 billion-a-year stamp
market.”[2] The number of collectors worldwide was estimated at
30 million in 2004.[4] In 2009, Adrian Roose of Stanley Gibbons
estimated the figure at 48 million including 18 million in China. It
is not know how many of these are serious collectors.
 While there are long term record of retail stamp prices, the first catalogue
being prepared in 1862, there is little objective historical data about the
past performance of stamps as investment. No long term indices like the
DOW Jones Index exist, although some figures have started to be complied
by Stanley Gibbons and Stamp Magazine in the UK.
 Since 2002, Stanly Gibbons have compiled a SG 100 Stamp Index based on
retail and auction prices for the “top 100 most frequently traded stamps”
in the world. This index now appears on the Bloomberg website. In 2004
they also launched an index of 30 rare British stamps.[9] According to
Stanley Gibbons, rare stamps have averaged an annual compound return
of 10 per cent over the past 50 years,[10] however, it is important to
remember that this figure has been calculated using back testing as stamp
price index are a recent innovation. In addition, the prices in the indexes
are based in part on Stanley Gibbon’s own retail price lists.
  
 Stamp catalogue prices are not considered reliable
as they are nothing more than estimates at the top
end and represent a retail selling price at the
bottom end of the market. Auction realizations may
be more reliable but are difficult to use as the
investor has to personally analyze the realization
from many auctions over a long period of time in
order to come to any useful conclusion. While most
trading in shares is on a recognized stock
exchange and task place transparently in public,
that is not the case with stamps where only
auctions transactions take place in public view.
Cat. Year Gandhi 1948 Gandhi '48
"Specimen"
Set of 4 Set of 4

1971 110.00
1982 1,450.00 5,000.00
1990 1,000.00 35,000.00
2000 2,000.00 60,000.00
2011 15,000.00 5,00,000.00

Sold at
Auction 45,000.00 12,80,000.00
 Never rush to sell stamps
 Sell like a Investor not as a Dealer
 Safe form of investment
 Loss of interest No loss of capital
 Investing in blue chip stamps via Auctions
 You are your best judge for investing

◦ Both when purchasing and selling

 Period Issued Stamps Face value Market value

1947-56 39 Rs. 22.63 Rs. 26,500.00

1957-66 119 Rs. 25.66 Rs. 4,500.00
1967-76 266 Rs. 118.75 Rs. 6,000.00
1977-86 343 Rs. 370.30 Rs. 13,000.00
1987-96 439 Rs. 1,243.20 Rs. 33,200.00
1997-06 636 Rs. 3,327.00 Rs. 25,300.00
2007-10 350 Rs. 2,050.00 Rs. 6,500.00
Total 2192 Rs. 7,157.54 Rs. 1,15,000.00

2011-16 * 540 Rs. 4,000.00 Rs. 15,000.00

* projected
 2016 Projected
Years Investment returns

2011 1,15,000.00 (M.V) Rs. 2,25,000.00

2011-16 4,000.00 (F.V) Rs. 15,000.00

Total Rs. 1,19,000.00 Rs. 2,40,000.00

 Yearly 12% Rate of
Years Investment investment Int. Total

2011-12 Rs. 1,15,000.00 Rs. 700.00 Rs. 13,800.00 Rs. 1,29,500.00

2012-13 Rs. 1,29,500.00 Rs. 750.00 Rs. 15,540.00 Rs. 1,45,790.00

2013-14 Rs. 1,45,790.00 Rs. 800.00 Rs. 17,495.00 Rs. 1,64,085.00

2014-15 Rs. 1,64,085.00 Rs. 850.00 Rs. 19,690.00 Rs. 1,84,625.00

2015-16 Rs. 1,84,625.00 Rs. 900.00 Rs. 22,155.00 Rs. 2,07,680.00

 Gold per
Year 10 Gms
1947 108
1948 109 Average rate of gold for 10 Gms = Rs 113.60
1949 112
1950 111 Cost to purchase stamps for the same period Rs. 22.63
1951 113 Cost to purchase 1.99 gms Gold = Rs. 22.63
1952 114
1953 114 ROI in gold Rs. 5671 sold at 28500 per 10 gm
1954 117 ROI in Stamps Rs. 26300 sold at M.V
1955 118
1956 120
 The future market for the sale of philatelic items is uncertain. The
demand for philatelic items comes principally from collectors, not
investors, and the majority of collectors are aged over 50 in western
countries. There are relatively few younger collectors in Europe and
North America that would be expected to be the buyers of the future,
although anecdotal evidence suggest that may not be the case in
India, China and other developing countries.
 In the longer term, the future existence of postage stamps may be in
doubt as people use electronic communications more and more and
send fewer letters. If stamps are no longer sold for postage they may
cease to be collected and if they are not collected, the vital collector
demand that underpins the investment market may disappear.
 Stamps have little intrinsic value, they do not have the raw material
value of gold coin, they do not represent a share in a business like
equities, and they usually lack the enduring visual appeal of a great
work of art.
 Stamps investment is relatively unregulated compared with, for
instance, investments in mutual fund and investors may have little
protection if things go wrong.
 Stamps do not generate any interest or dividend.
 It may be impossible to determine the current market value of your
stamps without selling them.
 Stamps may be relatively illiquid as finding a buyer may take time.
 Investing successfully in stamps requires a high degree of
specialized knowledge. This takes time to acquire and there are
many pitfalls for the inexperienced investor. Some of the risk and
disadvantages are:
 The return is uncertain.
 Special instruction will need to be given to spouses or executors
in the event of the owner’s incapacity or death as they may be
unfamiliar with philatelic items.
 Stamps may take time to be sold unlike cash, equities or mutual
funds which can usually be realized with minimal delay.
 There is very little reliable historical information about the
performance of stamps as investment.
 A long term view is necessary. A quick purchase and sale is
unlikely to be profitable.
 Stamps purchased for investment do not normally have any
special regulatory protection for the purchaser. In the United
Kingdom there is no regulation of this area at all from the
Financial Service Authority. Rules elsewhere may vary. Where
investment is collective though a mutual fund there may be
some regulation of the find depending on where it is based.
 In India SEBI and RBI are already planning to set up an
intermediary regulatory body with representation from
among the wealth managers themselves. The new rules would
cover entities offering wealth management or investment
advisory services across various asset classes irrespective of
the different financial markets
 You have to ask a few question of yourself if you
want to be an expert of philately.
 Do you want to lead your fellow philatelists, rather
than being ignored by them? Then educate yourself
and share what you know with others.
 Do you want to get goodies that busy and lazy
dealers over look for cheap prices?
Then ………READ.
 Do you want to make fruitful investment in stamp?
Then the answer is, READ as much as you can.
 You have seen them. They are usually quiet. They sit at
a dealers table and sift through everything within their
specialty. What are they looking for? Dozens of things:
cancellations, the rare shade, different perforations, die
variety, rare rate, rare destinations and many more
things. Don’t ask these experts; they are professionals
at what they do and they won’t tell you the secret. They
took the time to READ the book. They are experts and if
you know what they know, you would get in line or
ahead of them, wouldn’t you? So keep reading!
 A. Be a regular visitor at the post office philatelic bureau. The
advantages are many.

 B. By opening a philatelic deposit account, you are secured about

your supply of Mint Stamps, First Day Covers, Brochures and postal
stationary etc.

 C. You get the material delivered to your address without extra cost.
You get the stamps from the post office at face value, which is a
parallel currency and hence you are never loser.

 D. The brochure of any stamp is worth reading. It will help to learn

the details of the particular stamp. It will help to learn the particular
stamp. It is also a collectable item. 
 E. You get a chance to meet fellow philatelists of your area and it gives
you chance to exchange views.

 F. The department is carrying out all these activities to promote

philately. You can take advantage of them. So what are you waiting for?
Go and open a philatelic account.

 G. Be in touch with senior philatelist – they have learnt philately the

hard way and their experience will help you a lot.

 H. Refer to the many Internet auction sites on philately. Try to get few
good catalogues, reference books, auction lists Magazine, articles
written by senior Philatelists, and postal information from time to time
from post office.

 I . Always buy Mint stamps – At the first available opportunity

on the release date from the PO
 Go for Quality material even if is a bit more costly.
will be more worthy in the long run.
 Buy good accessories to preserve your philatelic
material in good condition.
 Visit National And International exhibitions witch
will broaden your vision for collecting.
 Become a member of local philatelic society where
u can interact with philatelists of your area.
 Never speculate on stamps unless you are guided
by the specialist of that subject.
 In conclusion, COLLECT or STUDY STAMPS FOR
ENJOYMENT. If you sell your collection someday and
make a bit of money on it, then fine. But if you
collect, with a focus on education and enjoyment,
you will never be disappointed!