Ask Melanie | Ask Melanie: Investing in stamps
Melanie Nutbeam, a certified financial planner based in Hong Kong, addresses common personal finance queries. Send your questions to [email protected]
It's easy to be seduced by stamps. They can be bold, beautiful and cryptic. They can be loaded with historic, cultural meaning and value; they represent the most expensive commodity on earth by weight, leaving gold, platinum and plutonium for dead. Sweden's "Treskilling" Yellow from 1855 at just 0.03 grams, is thought to be the most valuable thing in existence by weight and volume - it last sold at auction in 2010 for more than US$2.3 million.
While rare stamps can sell for many millions, there's a highly covetable bracket that starts from around HK$1 million. These are followed by a range of very respectable collectibles that can be yours from about HK$100,000.
Stamp values, like any asset, are driven by supply and demand and these are at their unbalanced best in the rare stamp universe. There are simply not enough investment-worthy stamps to satisfy new money and new desires emerging in places like China, India and Brazil. China is estimated to have 18 million potential collectors. Current and expected future demand has helped spur prices, even in 2008 as prices for stocks and bonds plummeted.
Stanley Gibbons, kingpin dealers since soon after the birth of modern stamp life in the 1840s, earns cachet as philatelist to the British royal family. More importantly, it maintains the serious collector's bible of stock and trade prices.
This has enabled it to launch and back-test several indices including the Bloomberg-listed GB30 Rare Stamps Index and the GB250 Rarities Index which are updated monthly. These indicate that average values have never fallen and compound annual growth has been around 10 to 11 per cent per annum over 50-year and 10-year periods for each index, respectively.