Investing in stamps is not just for the wealthy or those with years of expertise, according to a series of articles aimed at convincing readers of the value of stamp investing. While not as easy as buying and selling stocks, stamp investing offers a different risk profile with less volatility in pricing and better performance than stocks. A study published in 2020 builds on an earlier study from 1994, showing that stamps deserve consideration as a valuable investment diversification.
An analysis of recommendations from the 1994 guide “Best Buys In Postage Stamps” was conducted in 2020, looking at over 16,000 stamps and their appreciation histories. Mint stamps recommended in 1994 appreciated by 7.8% per year over the 25 years from 1993 to 2018, while those not recommended appreciated at a lower rate of 6.2% per year. This validated the assumption that stamps valued at $25 or more and issued prior to 1950 were more likely to appreciate, as well as the fact that analytical metrics could be applied to find stamps that outperform the average.
The analysis also examined the performance of used stamps during the same 1993 to 2018 time period, covering over 11,000 items. Recommended used stamps returned 10.2% per year, outperforming those not recommended which returned 8.8% per year. This demonstrates the strength of the stamp market over the last quarter century and shows that using financial analysis metrics on stamps can produce more positive results.
The overall performance of used stamps exceeded that of mint stamps during the 1993 to 2018 period, with used stamps also having a higher aggregate value in the over $25 category. Collecting used stamps is more popular than mint ones, but it is likely that mint stamps from early years are rarer and have more quality issues, potentially leading to significant outperformance of mint stamps over time.
Due to the massive task of pricing over one million stamps, 10 or 25 year time periods are often used for statistical measures. Catalogs like Scott may only update every five or ten years, making it valuable to consult websites like stampauctionnetwork.com for auction results. Some stamps are so rare that they may not trade publicly for decades, so a lack of price change over a 5 or 10 year period is not necessarily negative and should be taken into consideration when valuing stamps.
