How Much Should I Invest?

One of the advantages of stamp investment is the ability to not have to commit funds in one go. A portfolio can be acquired over a period of many months or years with items being gradually added over a period of time. In this way, money is ‘drip fed’ into stamp investment and you can take advantage of specific opportunities as and when they occur.

Unlike a share portfolio, a stamp investment portfolio does not need to be continually reviewed or consultations held with brokers to determine what should be held, bought or sold. Prices do not move dramatically up and down on a regular basis: your portfolio can be safely tucked away and left to appreciate. Historical price appreciation for rare stamps is in the region of 6% - 10% per annum. Some maybe more, some less.

Investing in stamps is not for those who are looking for an opportunity to quickly 'get in and out' with a view to making a tidy profit in a matter of months. However, it is very much suited to individuals who are looking to achieve steady, regular growth at appreciation levels significantly higher than bank deposit or saving schemes and without the volatility of the stock market.

Bear in mind the value of individual stamps in your portfolio versus the value of the portfolio overall. Aim to spread the risk in your own portfolio much the same way as you would invest in a selection of shares rather than tying your money up in just one stock. Certain stamps will always be more popular or more in demand than others. The greater the spread, the higher chance you will have of including items which will rise in value far higher than the portfolio overall. Not all stamps will rise in value at the same rate. Some may hold steady for a number of years and then experience a spurt in growth over a relatively short period of time.

Also consider your average buying cost. If your total budget is £25,000 say, aim to acquire 10 different stamps at £2500 each rather than one rarity valued at £25,000. Of course if your budget is £250,000 then a £25,000 purchase may well make sense. Note that the higher the value of the stamp, the fewer the number of people in the world who will be able to afford that same stamp upon resale. This is not necessarily a concern provided that demand remains. As Philatelic Investor consistently reinforces, there can be no substitute for knowledge and sound advice in advance of making any major purchase decisions.