The Sticky World of Stamp Collections

Tom Horn, director of sales division with the APS says many collectors enjoy the activity because they have total control over their collections. They decide what to buy, how to arrange their collections, and so on. Stamps' historical aspect can also encourage learning and Horn cites his personal experience. "I know I learned a lot about history, geography, science, what have you through stamp collecting," he says. "You wonder why a person is pictured on a stamp. Well, you go look it up and find out why. I never knew who Chief Sequoia was until the U.S. put a stamp out with him and then I found he developed the alphabet for the Cherokee Indians."

Collecting for Profit

It is possible to collect stamps with a profit motive, but both Trepel and Horn urge caution on that score.

There are numerous niches in the stamp market, says Trepel, and serious collectors in the different submarkets have a depth of knowledge and expertise that puts casual collectors at a disadvantage. That knowledge and the passion that collectors often have about their specialties can make prices volatile, as well.

"People who specialize in Colonial postal history suddenly find a very rare example of a marking applied in 1777 and they're all excited about it," says Trepel, citing a hypothetical case. "(They) may bid it up from what I think it's worth, which is a couple of thousand dollars, up to $20,000."

There's also a risk of stamp-price bubbles. Horn points to price behavior in the mid-1980s as an example. Stamp prices had been performing well and non-collectors began to buy actively.

When the stamp market began to show softness, however, these buyers began to sell out and accelerated the price decline. "From '84 to '85, the bottom just kind of dropped out as the investors got out," says Horn. "The market was flooded with the stamps that had been picked up a few years before."

Helpful Resources

Clients who want to get more serious about stamp collecting can find numerous resources for education and pricing.

The APS site (stamps.org), for instance, has extensive learning materials and an authentication service. SiegelAuctions.com also provides educational material and has a searchable database. The staff at both organizations can help collectors find the stamps they're seeking and avoid overpaying.