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Investing in stamps

22 Jan 2014

Investing in stamps can be more than just a hobby. It can reap some good rewards if you invest wisely.

The pros

Part of the reason stamps are so easy and beneficial to collect is that you’re not going to lose money on them. They are what they are in terms of value. It just so happens that if the stamp is rare or commemorative, that they may be more valuable than the figure printed on them.

The world's most expensive stamp is comparable to famous artworks, putting many of them to shame. Printed in Sweden in 1855, the tiny Treskilling Yellow is thought to be the most valuable thing in existence by weight and volume. The three-shilling stamp is now worth almost AUD10 million.

In 2011, the most valuable stamp collection in the world, owned by former Velcro chairman Sir Humphrey Cripps, was put up for auction. The total value is approximated at more than 20 million pounds. 

There are an estimated 50 million serious stamp collectors around the world so the finest rare stamps are always in demand, pushing their worth higher and higher.

While stamp collecting has few younger investors, as baby boomers enter retirement, it’s expected that they will go back to the hobbies of their youth, a major one being stamp collecting.

Things to look out for

When collecting stamps, it’s important to know what to look out for so you get more bang for your buck.

Of course, the ceremonial stamps are valuable at purchase and will only increase in value as time wears on.

Then there are also the time-based stamps. While not all have to be ancient, a general rule is the older they are the higher their value.

But what many people don’t realise is that mistakes on stamps also push their worth sky high. The main reason the Treskilling Yellow is thought to be so valuable is because it was, in fact, supposed to be printed in green.

Other stamps of value are the rare ones. In fact, it’s rarity that plays a big role in determining the ultimate value of a stamp.

A German stamp issued in 2001 featured a scene from Breakfast at Tiffany's with Audrey Hepburn smoking. After more than 14 million were printed, one of her sons refused to grant copyright permission as he was an active campaigner against alcohol and tobacco abuse. Most of the stamps were destroyed but a few still exist – and have sold for up to AUD270,000.

Be wary

Of course, there are risks involved in any investment.

Remember, that out of the stamp collection you had as a child, or the stamps that have been passed down to you from family members, very few will hold a large monetary value.

Also, stamps are not considered short-term investments. Experts say that you should hold onto a stamp for at least five to ten years before they exhibit any kind of worth. A big reason that the value of stamps appreciates is that they are no longer in production.

If you’re unsure, it’s always best to speak to an investor in the industry.

If you’re still unsure after talking to someone, it won’t harm you to start up a new hobby or go back to your youth and continue the delightful stamp collection.