Robert Murray Stamp Shop, Edinburgh
Established 1977
Members SPTA, PTS
Scotland's Best-Stocked and Most Popular Stamp Shop


 FOURTH ROUGH OF ARTICLE - please note that this article is not yet in its finished form, so if any bits seem badly written, or don't make proper sense, please look back again later.

Much time has been wasted over the years by people writing about stamp investment. Even more has been wasted by their readers !

To the simple question "Are stamps a good investment ?" the only simple and correct answer must be "Yes, they can be". But most people who try end up failing.

I've been a full time professional philatelist since 1975, and my views here are based on these years of experience. I'll state right from the start that my general feeling is against philately being seen as a vehicle for investment. The following article should be seen perhaps as a series of notes and comments. There will be no final verdict, as nobody could possibly be so definite. 

In most hobbies you spend money and get little back. At least with stamps you will get some return. The more careful and astute you are, the better your return might be. Just think what return on your money you get from the investment you make when your hobby is golf, or photography, or watercolour painting, amateur radio. 

Stamps can be a good way of putting some money into something alternative. That is, if you already have more traditional investments, having tangible and transportable items can be a kind of insurance against that terrible day when everything else fails.

Investment portfolios; If the stamps genuinely are good investments, why do they need to advertise them as such ? If they are recognised by knowledgeable people as a good bet, and they are correctly priced, they will sell by themselves. Does that maybe suggest that stamps being sold purely as an investment are either not the best choice of material, or are overpriced ? 

If someone bought shares, or put money into a bank, they would soon be checking up on how much they would get if they cashed in their investment. Most people with stamp investment portfolios never do that. Why not ?  If a portfolio was purchased, and the same day taken around reputable dealers and auctioneers, the investor would probably be shocked at what a big percentage they seem to have lost straight away. Of course, take the portfolio back to the original source and there's a good chance they'll get a better offer, perhaps just because they want to preserve their reputation (and of course if they are still selling portfolios, they can just pass it on to someone else). 

The knowledgeable experienced skilled collector will be able to spot when something is properly identified and properly priced. This means sometimes being able to pick up a bargain, which is always a good way to start an investment !  They also recognise when the true scarcity of an item is not properly reflected in the market price. 

The astute investment, in any field, is made by somebody making a decision against the general flow of opinion at the time. That is, when everybody else seems to have lost confidence in some commodity and there's many more sellers than buyers, the people who feel sure that the market is wrong can make their move and buy cheap, then wait for their hunch to bear fruit. The same often happens in stamps.

China Directives StripExample; Here's a Chinese set from 1968 which would have cost only £10 or £15 in the late 1970s, because China was not popular in the West, and there was no strong home market. Both of these factors have now completely changed, and the strip shown sold for £3,000 in our March 2010 auction. Someone guessing that this change in market circumstances would come about could have seriously scored.

UK Village Churches setOn the other hand, this UK Village Churches set from 1972 was being keenly sought in the late 1970s. I can remember paying about £5 per set to buy them for stock. Now we sell a set retail at 40p, we often have excess stocks, and end up sticking them on our mail.

It almost goes without saying that something sold in very large numbers will not be a good investment. An example of this in the first day covers of recent decades (of the UK and almost every other country). When originally bought by a collector, they were not priced at a market price (i.e. based on supply and demand) but at a retail price (based on cost of production and handling, along with current postage rates). When sold, supply and demand determine the price. In the UK, such enormous numbers were sold that the supply is almost certain to always outweigh the demand. [See our article on first day covers.]

High prices on some p.packs. (more speculative ?) 

Public Knowledge and Perception
Much of the public's knowledge about philatelic investments comes from the general media. The general media know little about stamps.  They generally have little to say on the subject until they are given a press release. These press releases are often swallowed whole by journalists, who don't have the specialist knowledge to know how to question them. And of course you then have to ask who issued the press release and why ?
Another thing to remember is that the media seldom if ever report ordinary items. If we sold an absolutely standard "Penny Black" stamp for, say, £40 (which we often do), we wouldn't bother putting out a press release. But if we had sold a particularly nice penny black, printed from plate eleven, used on a particularly nice original letter, for £10,000, and we put out a press release, it would likely get a headline something like "Penny Black Stamp Sells for £10,000 at Edinburgh Auction" without any explanation as to why this one was an exception. So people often hear of the big stuff, and not often of the ordinary.
There are some people who pretend to themselves that they are investing, where in fact they are looking for a justification for spending money on their hobby. Be a stamp collector and proud !  Philately is a great and a popular hobby, and if you have some disposable funds, there's no reason why you shouldn't spend it on yourself. It doesn't have to be logical. Many other pastimes people pursue, and spend money on, don't make much sense. But for some strange sociological reason, spending £50 on going to see a football match is not questioned, spending £50 on a stamp sometimes is.

Price Indexes
I do not know of any accurate stamp price index, present or historical.
Every one has flaws. Here's some examples.
{a} Many people, when trying to do historical stamp price comparisons, simply use catalogue prices. A catalogue price is not a market price. [See our article on catalogue prices.] See the "example" box below.
{b} Auction prices are a better reflection of actual market prices, but prices can be fickle. The same item at two different auctions can get two quite different prices. Also any person compiling such a record would have to make sure that quality was comparable.

Example; Do Changes in Catalogue Prices Accurately Reflect the Market ?; In the late-1970s the stamp market was very strong. In the UK, there was a very good demand for many Commonwealth countries, and for a while some islands (e.g. Pitcairn Island, Norfolk Island) seemed to have an unquenchable demand. Whenever we got in new stock, it would sell. People kept asking for it even when we didn't have it. We'd pay higher prices to buy in stock so that we'd have something for our customers. We therefore often had to increase our retail prices, and there were times that the catalogues would be running behind an increasing market, meaning that at times we would be charging prices higher than the catalogue price.
When demand eased off a bit in the early 1980s, prices came down a lot, which actually softened demand as collectors lost confidence, which further lowered prices. Catalogue prices were generally reduced at a much slower rate than market prices.
So you might find that in 1979, a set with a catalogue price of £4 was selling retail at £4, or even more. A couple of years later the catalogue price might have come down to £3.50, but you could maybe buy the set retail quite easily for £2. While the catalogue price had reduced by 12½%, the retail price had come down by 50%.
But a more accute reflection of the decline in price might be what you would call a wholesale price. At the peak of the market, with strong demand and dealers regularly selling out, many dealers might happily have paid 75% of their retail price for an almost guaranteed quick sale and profit. Roll the clock forward and you have the same dealers with sufficient stocks on their hands and no collectors asking for them. The price might have had to go as low as 10% of the catalogue price to tempt them to buy a lot of new stock (and many dealers simply wouldn't buy). In this comparison, the price of a collection with a catalogue price of £400 (and sale price of £300) has gone down to £350 catalogue (but sale price of only £35). That's a catalogue reduction of
12½%, with a wholesale price reduction of 88%.
Is a simple list and comparison of catalogue prices at different dates a true reflection of the market ?  No it is not.

Example; In 2007 an academic paper was published by Cris Veld Chris Veld and Yulia V. Veld-Merkoulova. It can be seen and downloaded from  In this study the authors extensively quote the "SG 100 index"; in fact it is the only indication they use in their analysis of stamp market prices. This, in my opinion, is seriously flawed, and I would argue negates the validity of the entire paper.
Stanley Gibbons themselves described their index as
"the top 100 most commonly traded postage stamps in the world"      
(There's another academic paper by Dimson and Spanjaers which states in its introduction "
This paper uses stamp catalogue prices to investigate the returns on British collectible postage stamps over the period 1900–2008.". See box above.)

Here's an example of

Price indexes. Are they valid ?  No, because there is no independent index published. The much quoted SG Stamp Indexxxxxxx is put together by Stanley Gibbons, and is based on their own retail (catalogue) prices.

"Our index is based on retail and auction prices for the top 100 most frequently traded stamps in the world.

"SG 100 Stamp Index

The SG100 index has been designed to provide the definitive measure of overall market performance and helps to measure individual price increases. We believe that the index highlights the real prices being achieved, especially among the classic Great Britain and Commonwealth stamps.

Our index is based on retail and auction prices for the top 100 most frequently traded stamps in the world. It includes items from all major collecting areas such as: Great Britain, Commonwealth and many foreign countries."

In the period quoted on the SG  website (2000 to July 2008) there is not any period in which the index shows a fall. Ask anybody who operates in any financial or commodities market if this is typical and they will tell you it is not. This suggests that either stamps are a solid permanently upward-moving asset, or that the index is not reflective of the true open market.

The content list of the stamps making up the index is not published.
Therefore when they decide to increase their retail price, they therefore increase their own catalogue price, and if the item is included in their list, their index total rises.
As the Australian dealer and philatelic journalist Glen Stephens wrote in an article on his website dated August 2005 "
Stanley Gibbons hold the ace hand as they themselves set the catalogue prices against which many stamps are "valued". And I can see they are making good use of this advantage." . . . and . . . " Many of us saw all this happen 25 years back with each new SG Catalogue appearing, and I get a strong feeling of Déjà Vu. Mark my words - you will see this same pattern occur for several years to come in SG catalogues. The bold graph on their "Investment" webpages depends on this occurring."

It should be pointed out here that their claim that this index is based on xxxxxxxx most traded stamps" xxxxxxx that this simply is not true. The "most traded" stamps are quite common !

I have run a stamp shop for over thirty years. We buy stamps. We do valuations. We run auctions. In those thirty years I have never handled a stamp investment portfolio that made the investor a profit. Not one.
I have however seen good stamp collections which have made a profit on their cost price. One collection we sold quite recently through one of our auctions came with a record of the prices paid. Some of the better stamps had actually been bought through our own auctions, and in many cases we were able to resell the same items for at least as much as had been paid - sometimes adding 50%, and in some cases even doubling the price after just a few years. The important point here was that the collector had been knowledgeable, choosy, and had not over-paid.

Some of the portfolios I have seen were shameful. On rare occasions stamps were included that were simply wrongly identified, or that were damaged (but sold as fine). More often it has been common to see that the items included were to some extent overpriced at the time of sale - sometimes by just ten or twenty percent, sometimes double or more the price you would normally have expected to pay in auction or through a dealer.

It is a part of this business I do not like. Too often I've had to explain to somebody that the £2,000 they spent in 1979 bought them stamps that could have been bought at that time for maybe £1,500, and that the present market value is only £700. (The late 1970s were a particularly bad time to buy; prices were high and investment much vaunted.)  Most people are fine about it, and take it on the chin, but to some it can come as a great disappointment. (On one odd occasion I remember a lady being delighted to hear what a bad buy a portfolio had been, as it proved just how stupid her ex-husband was !)
As an example of this, a portfolio which had been bought with the assistance of an investment adviser, and cost £15,000 in 1979 was entered for sale in one of our auctions in 2010. Presale estimates totalled just over £3,000.

A Suggestion; Have you bought something that has been sold to you "as an investment" but you now wonder if you have been taken for a ride ?  Why not go straight back to the seller ?
{a} Some sellers have no-questions money-back period, although this is often only about a month. Certainly if you are within that period, just ask for your money back. But even if you have gone past the time limit it is still worth asking - the worst they can do is refuse.
{b} It can be worth going back to the original vendor, even if it is some years since the material was bought. A bit of firm but polite pressure might bear fruit. "I was just wondering if the wording of your original advert was entirely legal ? Do you think I should maybe check it out with Trading Standards ?" Many sellers would rather take some financial hit rather than risk their reputation.
{c} If you have spent a lot of money, and wonder if you have been unwise, think of hiring the services of an independent stamp valuer. You can find dealers and valuers through their professional trade bodies (PTS in the UK, SPTA in Scotland, or for other countries check IFSDA). That can give you the confidence to argue your case.

The majority of stamp dealers don't involve themselves in the investment market. A great concern to most decent dealers (and the majority of stamp dealers are decent, especially those committed to one of the professional bodies) is that if and when things turn bad, as they have done in the past, the whole business is tarred with the same brush. 

dealers selling as investments is beneficial to them; average sale is larger - rather than a general or specialist collector looking over stock and perhaps buying little, the investment customer is likely to spend thousands in one go. Cynically, perhaps the fact that the average investor is less informed than a regular collector means that a higher price can be charged. You can sell stuff across the board, rather than being left with more unsold stock.

Example; Here's a couple of scans from a notebook included in a property we were asked to sell. In this case it is clear that the intention was investment. That's the actual word used. The "investor" had joined a movement popular at the time (late 1960s), and bought some mint sheets of current UK commemorative stamps. The most interesting point is that in these notes, a small chart has been drawn up showing how the value had changed over the years. At one point cost prices are shown, and these are compared to catalogue prices from later years, showing the difference in "value". Unfortunately, that definition of value is on quite different bases. The investor has not done their research - they seem not to have understood that catalogue prices are not directly related to sale values.

Three definitions;
Investment. Investment is the buying of stamps with a view, in the medium to long term, of selling them again at a higher price.
Speculation. A speculator will be interested in buying stamps to resell within a short time scale - perhaps days or weeks. Speculation also often involves a degree of market manipulation, for example seeing one type of material rising on the market and buying quantities of the same in the hope that, as well as the price rising further,  that the act of adding to the demand will accelerate any such rise. The speculator has to be able and willing to make the well-timed decision as to when to sell, as they are often active in a market where bubbles will burst.
Trading. If market prices increase while a dealer is holding stock, this is seen as a bonus, but is not the intention. A trader buys and sells stamps for a profit margin, seeing opportunities either to buy cheaper from one source so that they can sell higher to another outlet, or to buy items in quantity that can be sold singly or in smaller groups, and a profit made on the whole.

Example; ; In the early 1970s a syndicate of investors got together and put serious money into buying up quantities of the stamps of Guernsey and Jersey. They advertised aggressively, often advertising to buy at prices above the retail prices being asked by most dealers. This had three effects - firstly they bought many thousands of sets, secondly their actions served to push up retail prices, and thirdly they got thousands of people thinking that Channel Islands stamps were a good investment. This group of new investors themselves created an appetite for many thousands of sets, and they were willing to pay the current high prices. By the time the bubble burst, the syndicate had managed to feed back their large stocks onto the market, but of course at the new high prices.                                      

These, in my opinion, are the only ways that stamps can be a good investment;
{1} A good solid collection, with decent quality material sought out, bought at sensible prices, and assembled into a desirable collection. A "desirable" collection really means one that is better than most others. Investing in this way would entail at least several years of hard work, and the acquiring of much knowledge. It would almost certainly also bring with it some serious satisfaction !
In some rare cases stamps and covers can actually increase in value just by the very act of their being added to an already important collection.
{2} A collection of almost any type, other than of the cheapest types of stamps, will always have a resale value. The "good investment" this way is that you will probably lose money on the deal, but nothing like as much as you would if you spent it on other hobbies.


Robert Murray
© Copyright Robert Murray 2008-2015

Postal Address; Robert Murray Stamp Shop, 5 & 6 Inverleith Gardens, Edinburgh, Scotland, EH3 5PU
Telephone 0131 552 1220, or 0131 478 7021, or UK local rate number 0845 0500 886 

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