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Thursday 4 December 2008

Stamps are getting dearer

Rare stamps in a class of their own

Joanna Pitman advises investors who are wary of turbulent stock markets to investigate the world of philately, where values have risen steadily for 50 years

For all the 100,000 collectors on the books of Stanley Gibbons, there are only a few hundred investors, but 95 per cent of those investors make use of the company’s free

storage and insurance. There is also an offshore investment branch in Guernsey. Many investors never ask to see their stamps.

Curiously, the upward gradient of stamp indices has never correlated with the more familiar indices for shares or house prices, nor with those for art or wine. ‘Stamps seem to be in a category of their own: they simply do not link up with movements in other investment markets. Surprisingly few people realise how strong an investment in carefully chosen rare stamps can be.’

The royal family has collected stamps since they were invented, but it was George V who built up the royal collection and gave Stanley Gibbons a Royal Warrant in 1914. The present Queen is not an avid collector herself, but the Royal Philatelic Collection has been enlarged considerably during her reign. Housed in St James’s Palace under the care of its Keeper, Michael Sefi, the collection is now worth a very large sum indeed. Unfortunately I’m forbidden from revealing the figure. Six years ago the then Keeper of the collection invested in a block of ten Penny Blacks, one of the largest known blocks, produced on 6 May 1840, the first day of issue. It cost his employer £250,000. It would now be worth between £1 million and £1.5 million.

A typical stamp investment portfolio will include four or five different types of stamps: a handful of Queen Victoria high-denominations, some Penny Blacks and Twopenny Blues, George V seahorse stamps, Edward VII stamps, and perhaps a few modern

examples incorporating production errors. These specialist error items are very undervalued at the moment, says Anandappa: scarcity gives them the potential for a great rise in value over the next ten years.

The other big trend in the stamp world — as in so many other investment sectors — is a growing level of enthusiasm from new-rich investors in Asia. There are an estimated 18 million stamp collectors in China, many of them interested in early Great Britain and Commonwealth stamps. Similar interest is growing in India.

If you have some spare cash and you don’t like the look of the stock markets this summer, now might be a good time to retrieve your childhood stamp album from the attic and revisit a hobby that could bring you handsome and steady returns.

Read Martin Vander Weyer’s weekly business column at www.spectator.co.uk.

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