Friday, September 12, 2008

Stamps - A Bad Investment?

The quotes stamp dealer Robert Murray as saying that unless you're a knowledgeable stamp collector, stamps are not an investment option.

Murray, who since 1977 has run the Robert Murray Stamp Shop in Edinburgh, goes on to say, "Do not touch it unless you really know what you are doing. I have had hundreds of stamp investment portfolios bought to me and I can count on one hand the number that have been successful.

"We have seen portfolios from the market peak in 1980 that were hard to sell at 10 per cent of their market price."

According to Murray, the problem is typically that either the portfolios have been bought at the correct price but haven't proved a good investment, or too much has been paid for them (or a combination of the two).

Murray believes "If a stamp is a good investment and priced correctly it will sell because there is demand and knowledgeable people spend money on them. So if you buy one as part of an investment portfolio, you must be able to buy it somewhere else cheaper."

Murray added that potential investors should be wary of the promises set out in stamp investment promotions. For instance, he pointed out that the SG index promoted by Stanley Gibbons – which previously distanced itself from the notion of stamps as an investment – lacks the independence of, say, a FTSE index.

The guaranteed return product is similarly flawed according to Murray.

To read the entire article, click here.

For more on philatelic investing, click here.
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posted by Don Schilling at 12:01 AM