An “Inverted Jenny” was sold at an auction in June 2005 for $525,000.
Few hobbies are pursued as universally as stamp collecting. Although the vast majority of collectors are looking at this as a hobby, a study shows that this passion is among the top four investments of the 20th century, producing the second best annual returns.
A 2009 study by two finance professors, Elroy Dimson at London Business School and Christophe Spaenjers at HEC Paris, of the investment performance of British collectible postage stamps between 1900-2008 shows an annualized return of 7% in nominal terms, or 2.9% in real terms:
|
Mean nominal returns |
Real returns |
||||
|
Geometric |
Arithmetic |
Geometric |
Arithmetic |
||
| Stamps |
7.00% |
7.70% |
2.90% |
3.60% |
|
| Equities |
9.20% |
11.20% |
5.10% |
7.00% |
|
| Bonds |
5.40% |
6.00% |
1.40% |
2.30% |
|
| Treasury Bills |
5.00% |
5.10% |
1.10% |
1.20% |
|
| Art |
6.40% |
7.30% |
2.40% |
3.20% |
|
| Gold |
4.70% |
6.10% |
0.70% |
2.00% |
|
| Inflation |
4.00% |
4.20% |
|||
Source: Ex Post: The Investment Performance of Collectible Stamps http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1444341
Stamp collecting reached its zenith in the 1960s and 1970s. Despite the 1980s bust and the lower interest among younger generations, stamp collecting remains one of the world’s most popular hobbies and as the above study shows one of the most profitable investments.
And this is not a small niche industry: the tens of millions of stamp collectors worldwide annually spend up to $10 BILLION on their hobby.
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