Market Watch

“Safer than houses, more valuable than gold”

Stanley Gibbons Chief Executive, Michael Hall comments on the state of the GB rare stamp market.

I was born in 1970. Back then, an average house in the UK would cost you just £4,452…
 
Today, you’d need to be able to afford £162,887 to get the same house. That’s a total increase in value over 40 years of 3559%, working out at a compound average annual increase of 9.4%.
 
Obviously, £4,452 was worth a lot more money back then than it is now. But annual returns over the past 40 years still beat inflation by around 2.9% per annum.
 
You won’t find many investments that will give you that kind of long term return, confirming the well-coined phrase, “safe as houses”.

But… believe it or not, rare stamps from Great Britain proved safer than houses over the past 40 years…

The GB30 Rarities Index (as quoted on Bloomberg) provides a telling snapshot of the rare stamp market for GB stamps. It lists 30 top rarities available on the open market, representing examples of the type of classic material we recommend for investment purposes.
 
Over the past 40 years (1970-2010), the index is up 6403%, giving a compound average annual increase of 11%. Annual returns beat inflation by an average of 4.4% per annum.
 
Perhaps more importantly, the index has not dropped in value in any 5-year period over the past 40 years. You can now see why an increasing number of financial commentators are referring to our market as a “safe haven investment”.
 
After watching shares in even the mighty BP drop over 40% in the last year and the Irish ‘tiger’ economy collapse, it’s clear that fear and panic remains firmly in control of investor sentiment. The next unexpected event always seems to be just round the corner and stock markets remain volatile.
 
In times of panic, gold is a popular choice amongst traditional investors as a safety net. However, at times even gold has proved a lot less valuable than rare stamps over the past 40 years.
 
For instance, if you were invested in gold between 1980 and 1985, you would have lost 38% and between 1995 and 2000, 29%. So gold is safe if you get your timing right, but not always – it certainly can’t be classed as the perfect safe haven investment.
 
Not only do rare stamps hold up strongly against two of the classic assets, but they also provide the perfect hedge against the wealth-eroding effect of inflation…  The last time we experienced high inflation, in the period 1975 to 1980, the GB30 Rarities index increased in value by 593%.
 
Furthermore - when traditional asset classes nose-dived in the crash of 2008, the GB30 Rarities index actually increased in value by 38.6%.
 
Over the past year, the GB30 Rarities index went up by a further 7%, showing real stability and continued growth despite the continued difficult economic conditions and a consistently flat interest rate environment.
 
Your chance to grow your wealth
 
I want to give you the best chance of achieving good returns in the rare stamp market. Remember, average returns were 11% over the past 40 years and we have two strong investment products for you to choose from to ensure there’s something to suit you.
 
1. The Collectibles Growth Plan

This investment is ideal if you are looking for greater growth potential (particularly relevant in the current low interest rate environment), as well as peace of mind from knowing that you have invested in a tangible asset with a strong track record of performance and one that has no correlation to mainstream assets. This means your investment is unaffected by market crashes and economic swings.

Click here to find out more about the benefits of our Collectibles Investment Growth Plan.
 
If you are interested, simply e-mail my dedicated Investment Portfolio Manager team at investment@stanleygibbons.com to discuss your needs, thoughts or questions with them - or call them on 0845 026 7170.

2. The Portfolio Builder

This is a cracking product, designed with the Collector in mind.  The beauty of it is that it keeps you in complete control of your payments and allows you to build a powerful portfolio over time.
 
There is no tie in period or long term contract, (although we would recommend an investment holding period of at least 5 years to fully benefit from increases in value within the rare stamp market).  You build your wealth in a steady, measured but flexible way that keeps you in control.

The Portfolio Builder service offers investors the lowest entry level into the rare stamp market. You are able to subscribe for a minimum £1,000 initial payment, with a minimum £100 monthly direct debit thereafter. Stamp collectors have used this method for generations to build a valuable collection and a family heirloom to be proud of.

Once again, for more information, click on the link below or simply contact the investment team on 0845 026 7170 or investment@stanleygibbons.com

Find out more about our Portfolio Builder


Peace of mind and no charges

With all our products, we offer you free storage and insurance for peace of mind and to ensure the stamps remain in optimum, investment-grade condition.  Additionally, there are no management fees or administration charges – we simply charge a small commission on the profit when you decide to exit (details are in the Ts&Cs of each product).

PLEASE NOTE:- Portfolios are limited
 
The supply of rare stamps available for investment is also in short supply – so if you are interested at all, do contact us sooner rather than later!
 
Best wishes,
 

Mike Hall
Chief Executive
The Stanley Gibbons Group plc
 
An asset to hold on to

Gold made headlines in 2009 as its price continued to set new highs, but the picture for other tangible assets was distinctly mixed. Peter Temple of the Investor’s Chronicle explains why the future looks more promising.

In early 2009, prices in popular tangible assets such as contemporary art and fine wine continued to weaken as the crisis took its toll. Areas like this suffered because they had been target investments for bankers' bonuses. But as stock markets recovered, so did prices in many tangible asset categories.

Markets with a solid base of collectors were less volatile, but not immune to the economic backdrop.
But in general the coming year looks like being a good one for tangible assets - parly because expectations that consumer price inflation may rise will boost the value of hard assets.

Stamps

Stamps show a similar pattern. Prices hit a peak in October 2008 and since then have been patchy, with European stamps in particular showing softness in price.

The SG100 index, compiled by stamp dealer Stanley Gibbons, has been virtually static for the last year, as has its GB Rarities index of investment-grade stamps.

But in the latter case this followed price increases of close to 40% in 2008. Commonwealth stamps, however, have been affected less by the adverse economic background.

Mike Hall, Chief Executive of SG, is optimistic. "We are seeing the beginning of an influx of new money from investors into rare stamps," he says.