Putting A Stamp On Your Portfolio
Contributed by Stanley Gibbons Ltd

10% market returns per annum from stamps & autographs provide the perfect platform to diversify your wealth

Historic Returns
Rare stamps have always been a good investment. A leading US Investment Bank rates rare stamps among the top four investments of the 20th Century, giving an average annual return of 10%.

This belief is backed up by hard data. Stanley Gibbons, the leading name in stamps and autographs, publishes a number of performance monitoring indices which are now available to professional investors via their Bloomberg screens. These enable investors to compare performance with other asset classes.

Stamp prices, based on the above indices, have shown a 9.4% increase per annum over the past 50 years. The chart below shows the performance of the SG 100 Index (measuring a basket of 100 worldwide stamps) and the SGGB 30 Rarities Index (which comprises 30 of the rarest stamps of Great Britain) over the ten year period to 2007. With the FT House Price Index showing its weakest reading for 6 years and global stock markets showing sharp falls, it is encouraging to report that the prices of stamps continue to rise strongly.

The SGGB 30 Rarities Index continues to outperform traditional investments, having risen 9.95% in the past year and more than doubled in value in the 6 years from 2001 to 2007. Stanley Gibbons has been publishing stamp price catalogues since 1867 and has annual pricing data on every stamp issued. 

The 100 most popular autographs have also shown impressive growth over the past 10 years, with a cumulative increase in value of 256%. Some items have recorded incredible growth in value over the last 10 years with Neil Armstrong, Paul McCartney and Andy Warhol pieces seeing growth of between 850% and 1000%.

Malcolm Forbes of Forbes Magazine comments on autograph values:
"In my view, they are the most undervalued of all areas of collecting, especially when you consider what people are paying for even second rate paintings."

Demand is outstripping supply for the rarest items in premium quality condition, forcing prices upwards

Over 48 Million Collectors Worldwide
Collectible tangible asset investments do well over time because their supply is restricted. Prices rarely go down as they are underpinned by a huge worldwide collector base. A survey by the Universal Postal Union (UPU) revealed that there were over 30 million collectors around the world spending over US$10 billion per annum on their hobby. To this can be added a further 18 million collectors in China now able to indulge their passion for stamps. This huge collector base provides the best possible backing for prices.

With an ever diminishing supply and increasing demand, together with loss through damage or destruction and donations to museums, there is a natural consistent increase in prices of rare items in good condition. Many of the rarest items can be counted in single figures and this has led to fierce competition from wealthy collectors, keen to add these gems to their collections.

“Over 4 times profit – it’s better than the Stock Market”

From US$2.5 Million to US$10 Million in less than 10 years
The best recent example of scarcity driving prices to new highs has been the sale of part of the William Gross Collection in New York in June 2007. Bill Gross is the legendary manager of the $700 billion PIMCO Bond Fund and a lifelong stamp enthusiast. In June he decided to sell part of his Great Britain collection for charity. The collection had been assembled from 1999 to 2002 at a cost of $2.5 million. It contained a treasure trove of wonderful pieces and the auction proved to be the philatelic event of the year. When the hammer went down for the last time for a total of $10 million Bill proclaimed that stamp collecting was ‘better than the stock market’.

Liquidity and Portability
Stamps and autographs, which benefit from being highly portable, are internationally traded in all currencies and the price obtained is constant wherever you sell them. There are regular sales in major cities worldwide and the wealth of information in catalogues and on the Internet means that real time prices are easily accessed. This globalization meant that Bill Gross was able to obtain top prices for his Great Britain collection when sold in New York. The highest price at auction for a Penny Black, the iconic stamp that started it all in 1840, was obtained at a sale in Denmark. Recent auction realisations for quality material are often exceeding current listed catalogue prices, an indicator of a strong market.

"If you share my view that the stock market is likely to go sideways and the residential property market will be lucky not to go backwards over the next year or so, you might well be scratching your head about where to put your money."
Tom Stevenson, editor Hemscott.net

Market prices are readily available through Stanley Gibbons' printed and online stamp catalogues. The Internet has opened up the world market of collectibles and provided increased visibility and tradability. Stamps are the third most popular sales category on eBay. Auctions and the Internet are now reducing the spread on the buying/selling price, which is giving increased confidence to both collectors and long-term investors.
Rare stamps and autographs benefit from their portability. By weight, stamps are the most valuable commodity on earth and this only adds to their attraction as investment items.

Diversification
Diversification helps minimize the impact of falls in any investor’s portfolio of traditional assets. Rare stamps and autographs offer highly attractive risk/return trade offs because their price performance has a low correlation with that of other major asset classes. In addition, the support of the massive collector base referred to earlier means that the prices of rare collectibles has low volatility and does not show the spikes that occur in a purely investor driven asset.

"The average high-net-worth individual invested approximately 12% of their assets in alternative investments in 2004."
Merril Lynch Wealth Report

Investments in collectible tangible assets have, historically, been broadly unaffected by political and economic vagaries and therefore can offer a form of protection and insulation to an element of your net worth. Stanley Gibbons offers two tailored rare stamp and autograph investment products to enable you to diversify your investments and risk, in order to obtain the best returns within your chosen time frame.

Prospects
The current economic environment has changed the historic perspective. It provides conditions ideal to invest for maximum growth potential, when compared to returns available from mainstream investment.
The fundamental market forces of supply and demand suggest that stamp prices will continue to rise in the future, and the historical evidence is that rare stamps and autographs have proved to be a consistent and reliable medium to long term investment.

Fact: The only growth consumer market
A large percentage of collectors are in the 50-60 year age group, the only growth consumer market according to the UK Government Actuary Department, due to their higher disposable income. With official British Government figures showing an expected 6 million extra over 50's by 2012 in the UK alone and 27.4 million by 2040, the next 35 years look set for a boom period for collectibles as baby boomers invest this disposable income in hobbies/alternative investments such as stamps. This increased interest for a limited supply product can only have positive effect on prices.
We are also seeing the emergence of new economies, with new wealth on a staggering scale, especially in Brazil, Russia, India and China. New collectors in these countries are looking to buy the rare items of their country that invariably have been sold abroad in the past as they appreciate their national heritage.

Pride of Ownership
"None of my other investments give me the joy that autographs do, because they make me feel that I am holding a piece of history in my hands."
Malcolm Forbes of Forbes Magazine

Excellent returns are complemented by the wonderful feeling of pride from owning such an important piece of history. No other alternative investment can offer such an eclectic range of benefits and emotions. How many people do you know with a genuine signed Marilyn Monroe photograph or a unique stamp with full provenance with only one other example in a national museum?

“Apart from the obvious point of portfolio diversification, the fascination of owning something of which there may be only half a dozen examples in the world is very powerful. And so long as Man’s obsession with collecting things continues, the laws of supply and demand will ensure that rare stamps continue to appreciate in value over the long term.”
Dominic Pemberton, Director, Cazenove Singapore

At Stanley Gibbons, we take pride in the fact that many of our investors develop their portfolios into award winning international collections: an achievement which gives added interest, provenance and value to their collection.

How do I Invest?
Visit the Stanley Gibbons website for more details. Click here

150 Years
Stanley Gibbons, a holder of the Royal Warrant, was established in 1856. It has been the number one brand name in stamp collecting for 150 years. When Mr Stanley Gibbons started his philatelic business in 1856 he formulated a policy which grew into a Stanley Gibbons tradition: to deal in fine quality items and to give careful and objective advice based on specialised knowledge. As the market leader, the Company has the global prominence to source the finest investment grade material, dealing with over 100,000 clients throughout the world every year.

London and Guernsey
Stanley Gibbons set up a designated Investment Department during 2003 to cope with demand. The Department, based in London has grown considerably since inception and now has over £millions of stamp and autograph portfolios under management. In 2006 an office was opened in St Peter Port, Guernsey, to deal with the increase in demand from offshore investors.

Key Elements of Service
Our qualified team of experts is able to handle all aspects of the investment service: from offering only the highest grade material for purchase, to providing full assistance on exit strategies to maximise return. Investor confidence is increased in the knowledge that Stanley Gibbons only sells material which we would ultimately be pleased to repurchase at a later date.

Stanley Gibbons offers secure storage and insurance facilities in our vaults at 399 Strand, London or offshore in our Guernsey facility, free of charge for the duration of investment. On certain products interest free payment terms are available, providing investors with added confidence and flexibility. Free annual portfolio valuations will be provided so that you can follow the performance of your investment.

Contact: Adrian Roose, Investment Director
Tel:+44(0)1481 708 277
Toll Free from the US: 1 866 644 6146
Email: investment@stanleygibbons.co.uk
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