Philatelic

  Investor

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Exit Strategies

Stamp investment should be viewed as a medium to long term proposition. Holding a portfolio for five to ten years should allow you to recover purchase costs and allow enough time for growth to become apparent. However, the longer you are prepared to wait patiently the greater the opportunity for growth.

Stamp investment should not be viewed as a ‘get rich quick’ strategy. Gains are based on incremental, steady growth over a period of years with a view to realising your investment at a distant point in the future. As such, stamp investment can be a very useful investment vehicle to build a fund for the future such as supplementing a pensions saving plan (although it would be unwise to rely solely on this strategy alone).

There are opportunities for quick returns. Spotting an underpriced item that others have missed is an obvious case in point…but this relies on chance and appropriate knowledge. There is the potential to purchase items on one side of the globe and then re-sell in a local market (for example, to buy investment grade German stamps in Canada and then re-sell in Germany where demand is likely to be higher). There is the opportunity to take advantage of currency variations and buy ‘underpriced’ material in a country with a weaker currency than the one you are buying in.

Unfortunately, these are very speculative approaches and unless you have the right knowledge, contacts or luck they are unlikely to prove very successful. Our recommendation is to buy well and aim to hold for at least five years.

When the time does come to sell, specialist dealers and auctions are the two routes to consider.

The advantage of selling to a dealer is the ability to realise your investment rapidly. Your portfolio is valued, an offer made and the money could be in your bank account within a matter of days. The downside is that the dealer is buying to sell. In other words, he needs to make a profit on his purchase and find a buyer willing to buy at a price higher than he bought at. The dealer is making a cash outlay and taking on the risk of finding another buyer, hence you may not be getting ‘top dollar’ for your portfolio. It goes without saying that you should get a least two valuations before you commit to sell but bear in mind, the higher the value of your portfolio, the fewer the dealers available to part with what may be a significant cash sum.

The alternative is the auction house. Specialist auction houses will be able to offer a likely realisation value, divide your portfolio into appropriate lots, advertise your items to an established client base and attempt to get a good price for each item. For this, you may well be charged a commission on the sale, will need to wait for the auction (which may be months after you have made the decision to sell) and have no guarantee of the amount realised and whether all lots will sell. However, this method of sale is likely to offer the best chance of maximising the sale price. Again, as with dealers, it would be worth approaching at least two auctioneers to get an understanding of what is on offer, terms and conditions, the size of their client base and so on. If you have a stamp collection (pre 1950 only please) and require guidance on selling your collection, please contact us.

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