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OTHER RISKS
Occasionally large stamp collections can
come onto the market (usually when a
collector passes away) which can push down
the prices of some assets if it produces a
sudden glut of supply. This usually only
has a minor or temporary impact. Buried
hordes of ancient coins are sometimes
unearthed as well – the William I silver
penny was considered to be a very rare coin
until over 8,000 of them were unearthed
in 1833, which decimated its rarity value.
Such finds are less frequent today.
Forgery is unfortunately a risk with both
rare stamps and coins. Rare stamps can
be forged outright, although this practice
is thought to be rare these days. More
commonly, the condition of stamps can
be artificially improved – stamps can
be re-gummed, re-perforated, cleaned,
margins can be tidied up and pen marks
can be removed. How much of this
could be considered legitimate and how
much is outright faking is a matter for
debate amongst the collectors. Rare
stamps can also be made more desirable
by adding a forged cancellation mark,
which turns a poor quality unused
example into a fine quality used one.
Coins can be forged by using moulds
taken from existing rare coins. This is the
simplest method of forgery, but can usually
be quite easily detected by an expert. The
more sophisticated method is to engrave
dies based on original coins so that copies
can be struck. This method is much harder
to detect, but investors and collectors do
not need to be unduly worried – reputable
dealers and organisations such as British
Numismatic Trade Association are happy
to help assess coins for authenticity. Many
coins have signed authenticity documents.
REGULATION
Stamps and coins are unregulated
investments. They are personal property,
not financial securities or promises to pay
in the future. This is part of their tangible
nature and one of the qualities that makes
them such good diversifiers. However, this
does mean that they are not covered by
the FSCS (Financial Services Compensation
Scheme). If your broker or agent were to
go bankrupt while holding your cash or
your investments, you could lose all of your
investment. Similarly, they are not covered
by the Financial Ombudsman Scheme
(FOS), so if you are mis-sold an item there
is no recourse to the ombudsman to try
and hold the seller or broker to account.
However, the investors would still own
a tangible asset which holds intrinsic
value, and as long as it has not been sold
at an inflated price the investor should
be able to sell on the open market.
Mints and postal authorities around the
world issue commemorative sets of both
coins and stamps to mark important
occasions such as a royal birth, an
important state anniversary or an event
such as the Olympics. Whilst these might
have value for collectors who are following
a relevant theme, they never have
investment value as rarities and should
be avoided by investors. Indeed, in the
60s and 70s many small countries were
deliberately issuing these sets to cash in on
the demand from collectors – but they were
issued in such numbers that they would
never have any financial value. Gambia and
Liberia, for example, each issued more than
500 different new stamps in one year
3
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COMMEMORATIVE SETS
“Investors potentially need to factor in future price volatility. As stamps become more mainstream for
private and professional investors then volatility could increase over time.”
David Stevenson, FT Columnist
“There are so many nuances that determine whether a stamp
is suitable for investment that we strongly recommend you
consult an expert. It’s also important you buy from a name you
can trust, as a guarantee of authenticity is only as good as the
organisation issuing it.”
Keith Heddle, Stanley Gibbons Investments
