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Welcome to the first accredited report looking at rare stamps and
coins as an asset class.
Stamps and coins are a genuine alternative asset class, that display all the
characteristics - both good and bad - that are common across alternative
assets.
On the positive side, they are uncorrelated to the mainstream financial
markets.The charts and performance data in the report show how they
outperformed during the financial crisis in 2008 and subsequent recession.
This characteristic gives them great diversification benefits. Unlike some so
called diversifiers, they continue to provide diversification when it is most
needed - in a crisis.
They also hold out the possibility of very strong returns. Collectibles have a
unique, inverse supply and demand curve: no new supply can be created,
nobody can go back and mint ancient coins or print rare stamps. And as
we see new sources of demand coming from younger collectors and growing
interest in emerging economies such as India and China prices for scarce
items can only be pushed higher.
In addition, as tangible assets they present investors with one way to beat
financial repression: the low interest rates, money printing and silent
currency war that our central banks are resorting to in order to stimulate
the economy.They can be a hedge against, and protection from, inflation,
devalued currencies and punitive taxes.
And there are other intangible, but significant benefits - the joy of making
an investment of passion and owning a piece of history.
On the other side of the equation, stamps and coins are a very hard asset
class to access without the requisite knowledge and experience.They are not
fungible - each item is completely and totally unique - forgeries exist, and
as non-financial assets with no revenue streams conventional valuation
models such as discounted cash flows are useless - mainstream analysts are
at a loss and as a consequence orthodox investors tend to stay away.
For those who buy-in to the investment case, but don’t have the confidence
to enter the market themselves, there is a solution. Merchants such as
Stanley Gibbons have recognised that there is demand for an investment
service that allows non-experts to participate in the market and have
created a small range of products to meet this need.
This report takes a look at the pros and cons of rare stamps and coins as an
asset class: both making the investment case and highlighting the potential
pitfalls for the unwary. We think you’ll find that, like all collectibles, stamps
and coins are an interesting, engaging and intriguing asset class.
GuyTolhurst
Managing Director
Intelligent Partnership
OPENINGSTATEMENT
EDITORIAL
Daniel Kiernan
Luke Jackson
Samantha Goins
RESEARCH
Luke Jackson
Samantha Goins
CREATIVE
Colin Brampton
Michelle Hilger
PRINT
Stephens &
George
COPYRIGHT © INTELLIGENT PARTNERSHIP
MARKETING
Georgina Stockley
SUB-EDITING
Guy Tolhurst
