Is Stamp Collecting An Investment? Part 1

Throughout this website you have read much about one stamp being more valuable than another. It has been pointed out that the various tools described are needed to identify a less valuable stamp from one of more value and that it is necessary to know the fundamentals of printing, of paper making, and many other things in order to identify each individual stamp. We have indicated that a youngster found a stamp of great value in a cheap packet of stamps, that another collector purchased a stamp for ten dollars that later was to bring over one thousand dollars at public auction. We have recounted various finds made by lucky people in the past and have indicated that such luck may also be your own if you know what to look for. All of this is true. No one may gainsay that the search for a treasure trove is exciting or that this search has considerable opportunity for fulfilment in philately. Everyone, at one time or another in his collecting activity, makes a find that thrills him. Such a find may not be large but nevertheless the thrill will be present and the satisfaction of the moment will be great. Nor can anyone hold forth in truth that the monetary value of a collection is not of considerable interest and concern to the individual collector. Indeed this whole book has been concerned with revealing the secrets of philately so that you may not be led astray or induced to spend your money unwisely.

Nevertheless, is the collecting of stamps an investment?" Let us not be misled by wild and unfounded claims. It is pleasing to reflect that if we had bought a couple of sheets of the Norse American stamps when they were first issued in 1925 our investment of seven dollars would today be worth several hundred dollars. Just as it is pleasing to reflect that had we purchased some of the common stock of some of our large corporations when they were selling for a "mere song," we could today reap a fortune. But this is hindsight, a daydream we indulge in to idle away a few moments - not one to which we attach serious importance.

Stamps as an investment might be likened to unimproved real estate. So long as real estate remains unimproved it will not increase in value and will, in fact, eventually eat its head off in taxes. The true investor must consider what the interest will amount to on the money he ties up. If, as is forcibly presented by the proponents of "buy stamps for investment," it becomes necessary to hold those stamps for a "waiting period" of from ten to fifteen years before any appreciation takes place, the interest on the money invested may well eat up any profit we might hope to make. Like unimproved real estate, if we guess right we may make a profit but we shall have to wait many a year to find out. The plain fact of the matter is that, from a purely financial standpoint, stamps are not an investment in any real sense of the word. They may present some of the elements of speculation, which consists of buying stamps that presently have a collector's value - i.e. worth to collectors more than their "face" value - but which you think are priced too low. Certainly it is not an exciting speculation to purchase unused stamps at the Post Office and wait ten or more years in the hops that you have guessed right.