Risks of Collecting Stamps as Philatelic Investment :
(From Wikipedia : http://en.wikipedia.org/wiki/Philatelic_investment)
- The cost of buying is high compared to most other forms of investment and cost of selling is also relatively high.
- As tangible items, stamps may need to be insured and are at risk of physical damage or deterioration and don't give any interest or dividends.
- The future market for the sale of philatelic items is uncertain. The demand for philatelic items comes principally from collectors, not investors, and the majority of collectors are aged over 50 in western countries. There are relatively few younger collectors in Europe and North America that would be expected to be the buyers of the future, although anecdotal evidence suggest that may not be the case in India, China and other developing countries. (But it will happen eventually when real FACTS will come out.)
- In the longer term, the future existence of postage stamps may be in doubt as people use electronic communications more and more and send fewer letters. If stamps are no longer sold for postage they may cease to be collected and if they are not collected, the vital collector demand that underpins the investment market may disappear.
- Stamps have little intrinsic value, they do not have the raw material value of a gold coin, they do not represent a share in a business like equities, and they usually lack the enduring visual appeal of a great work of art.
- Stamp investment is relatively unregulated compared with, for instance, investments in a mutual fund and investors may have little protection if things go wrong. (No SEBI or SEC)
- The size of the philatelic market is small compared to the value of the stock market and vulnerable to aggressive buying by speculators which may distort prices.
- Stamps may be relatively illiquid as finding a buyer may take time and impossible to determine the current market value of your stamps without selling them as very little reliable and independent historical information about the performance of stamps as investments.
- Stamps may take time to be sold unlike cash, equities or mutual funds and sometimes it don't even sell.!!
In past I had written blog post about similar F.D.C which was sold under $1.!! Click following link to read it.
Now you might be wondering is it make sense in stamp investing.
If collector paid $20 when he will recover his value.!! According to me this will never happen because Gandhi stamps and Philatelic material are available in plenty.
1) A Hobby in Decline : 1948 Gandhi USED cover case study.!!
2) A Hobby in Decline.!! - Part-2
3) How to invest when philately price is dropping.
If you see stamps are not even selling or selling like 5-10 times lower their value than mentioned in catalog.!!
There is nothing RARE or Scare in philately because this hobby is in downward trend because experienced collectors are loosing interest because value is not appreciating and new collectors are not coming in to this because there are lot of other things to do for them such as playing video games on Nintendo or X-box , social networking on facebook or google+ or surfing on web through internet or SMS through iphone or android or watch games such as cricket, football or basketball.!!
1) 1948 Stamps False hope of Riches?
2) 1948 Gandhi Stamps: Are False hope of Riches - Part II ?
3) 1948 Gandhi Mourning Private FDC : Are False hope of Riches - Part III?
4) 1948 Expensive Gandhi FDC : Are False hope of Riches - Part IV?
5) 1948 Gandhi Stamps Early Usage cover : Gandhi Stamps Are False hope of Riches - Part V?
6) Maxi Card sold for $5100 with 1948 Gandhi Stamps - False hope of Riches - Part VI?
7) Indian Philately Exposed
8) Indian Philately Exposed - Part II
9) Gandhi SERVICE overprint stamp price fell from $1009 to $1.!!
10) How can you tell that Gandhi SERVICE stamp is FAKE or Forgery ?
I hope all the above will help while making decision in investing stamps and to avoid getting CHEATED.!!
Now don't you think it does NOT make sense STAMP INVESTING!!
Gandhi Stamps Club.