Stanley Gibbons Investment Service

Playing around online, I found this service from Stanley Gibbons which seems to be an investment plan for non-stamp collectors. They create a portfolio for you of rare and valuable stamps and you send them monthly amounts for future investments. I imagine most of you have heard of this service but I am curious about it. They buy the stamps for you but they also make the price guides showing how valuable the stamps are. This seems somewhat suspicious.

Anyone ever dealt with this service?

http://investment.stanleygibbons.com/

I think there are more transparent ways to invest your money.

There'd only be an issue if SG were the only catalogue provider. As it is, its price for investment grade items is unlikely to be out of line with those of Scott, Michel et al. Of course, if they all operate investment services, there would be scope for difficulties.

I believe that these 'investment portfolio' products first appeared during the asset inflation of >30 years ago.

People wanted into the rising market, but did not know what to buy and, in the manner of free markets everywhere, solutions arose.

Stamps are a pure asset play, offering no income stream, only the promise of capital gains.

Unlike most other asset plays, stamps are also subject to a great deal of fashion, fancy & whimsy.

(The alternatives are asset plays based on continuing & relatively 'hard' human needs, like land & minerals.)

Lastly, stamps (like all elements of culture) may have a demographic issue.

Q/ Will there be enough new opera lovers to create a return on your 'investment' in opera ephemera?

Q/ Will there be enough new smokers to create a return on your 'investment' in ashtrays?

For further reading, I suggest:

https://goscf.com/t/38527 ... The Investment Meme Must Die

Cheers,

/s/ ikeyPikey (who edited this to correct hand-keyed html-type tags)

I'm still of the opinion that stamps make a great hobby but a horrible investment. Even if one is "investing" on their own time, you still have to wait long enough for any appreciation in value to overcome dealer markups, auction house fees, etc. And I'm sure Gibbons adds commissions and/or fees on top of all that. In my opinion, SG's investment scheme falls into the category of "high risk, low reward". I could be wrong about this, but my assumption is that the minute they buy something for your portfolio, you're probably 25% or so under water right off the bat and it will have to appreciate that much or more before you even break even. I doubt most mainstream investments start off with a handicap that steep.

I'm 100% in favor of both stamp collecting and investing one's money wisely. But in most cases those two things are mutually exclusive.

Remember Afinsa and Forum in Spain...a waste of time and MONEY

It also appears to carry a 20% back-end load. So not only does SG make profit when you send them your minimum £1,500 per quarter--they are undoubtedly buying your items on the open market at a low or below-catalog price, then crediting your investment portfolio at catalog value (or moving, to your portfolio, in-stock items that they already bought low and revalued at catalog)--they take 20% from you when you exit.

This appears directed at high net worth individuals who want a portion of their assets in something other than equities, bonds or other traditional instruments. These are the same people who hedge some of their money in gold or commodities.

The stated average return of 9% per year over 40 years doesn't seem that strong.

"Investment advisors" sold these things in Canada by the hundreds years ago and people bought them thinking they were going to make a fortune. I've seen a few, and they appear regularly at stamp auctions. I would not say they are worthless, but the "investors" have really nothing to show for their "investment." Same deal as people buying a diamond ring at a jewelry store as an "investment." These are consumer products that only very rarely even return the original money put into them.

Right. How many times have you heard someone say "Wow, I really made a ton of money on my last engagement ring!"

There's a reason why things like stocks, bonds and real estate are the most popular investments. They are known commodities with (largely) known market forces acting upon them, with a large regulatory framework governing their buying and selling. Collectibles have little of that, which I suppose is part of their appeal to some people. "Investing" is perhaps the wrong term to use in this case; "speculating" is probably more accurate.

As opposed to other diversions such as skydiving or fly fishing, better stamps are a store of value - if I spend $1000 on stamps, they're still going to be worth something when I sell. It just likely won't be enough to even recoup my original purchase price, much less anything that could be called an investment.

Thanks guys. It's too rich for my blood and I don't see the fun in it but I was just curious. Would like to see the actual real-word results after five or ten years to see how well it actually performed.

I would never buy something from a group that publishes the catalog that is used to set the values (both now and going forward) of the stamps they are selling you.