Postage Stamps as an Investment
You may never have thought of postage stamps as being an instrument of finance, but rare postage stamps can have considerable value and are traded quite frequently within their own marketplace sometimes for massive amounts of money.
Just to give you an idea what the value of a rare stamp could be, a British Guiana 1-cent Black on magenta sold for US $9.48 million in June of 2015.
Now that's one heck of a trade! This stamp was purchased for a penny at one point in time and now just sold for more than $9 million. I'm all over this! I am actually physically located in Thailand where the King just died a little more than 100 days ago and I am making it my first order of business to purchase postage stamps that commemorate his death, and instruct my children to preserve them well for their children.
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Now that I know how much a rare stamp can increase in value, my antennae are up and alert for this type of trading opportunity, I honestly never thought about stamp collecting or purchasing stamps to sell far off in the future to benefit descendants 3 generations removed from me but it is definitely a sound strategy to produce phenomenal gains if you have the patience.
What makes rare stamps valuable? Lets create a checklist of criteria that can aid us in our pursuit of gains from investing in rare stamps.
First and foremost, the stamp has to be verified authentic. Trading stamps for monetary exchange is unregulated so let the buyer beware. Be sure you have access to trained and certified professionals that can provide you with a certificate of authenticity regarding your stamp. The condition of your stamp is extremely important as well. Stamps have a “grading” system in place to describe their condition and value. The highest grade of “superb,” describes a stamp that is considered perfect in all respects and of the finest quality, A grading of “poor,” describes a stamp where the design is off-centre or perforations are cut into the design, the stamp itself may either be torn or damaged. The state of the gum side of the stamp must be examined along with level of color fading on the printed side. Stamps in the best condition trade at the highest levels. Collections of stamps also trade at high levels, examples of thematic stamp collections include Royalty or prominent political figures. Stamps that mark the birth, death, or marriage of a member of a royal family, or prestigious bloodline within a sovereign nation are highly prized and sought after by collectors. A particular period of time, a specific sport or sporting event, and collections of stamps pertaining to a specific animal are collections that attract interest from collectors.
Where can you find these wonderful collectable stamps? Online purchases of collectable stamps have become quite commonplace and your purchase comes with a certificate of authenticity. Be sure to check the feedback on the seller to ascertain his credibility. Trade shows are also very useful to the new collector. At trade shows you can make relationships with vendors and other buyers, giving you the opportunity to make friends and enjoy this undertaking even more. Stampshows.com has a listing of international stamp trade shows that can put you with the right people all over the world.
Lastly, become well informed about collectable stamps and every aspect of the trading process. Research and relationships with other collectors and dealers will be most useful in achieving this goal. The prices of collectible stamps have tripled over the last 10 years. The annual growth rate for a rare stamp is approximately 11 percent annually. Rare stamp dealers have also put together a stamp fund to help investors take advantage of that 11% growth rate. You can store your stamps at home or with a professional it is very important to insure your stamps for flood, fire, and theft. Most collectors purchase a stamp and hold it for about 5 years to take advantage of that great 11% yield. If the purchase, hold, and sale is done through a dealer the customary fee is 20% of the gain. If there is no gain the credible dealers will give you back your purchase price at no charge.
Compared to Art, Antiques, and Coins, stamps appear to have a stronger growth rate in value and a shorter period of time to realize gains. Collectable stamps appear to be a very sound investment strategy they can surely be considered as an Alternative Investment that has the potential to help you maintain your wealth outside of traditional investments in stocks or bonds.