Stamp collecting can be both a personal passion and a serious financial investment. As a full-time stamp dealer, I’m often asked what I collect and how I approach my own stamp holdings.

In this post, I’ll break down the differences between collecting and investing in stamps, provide insights into what makes a stamp a good investment, and showcase some of the top pieces in my personal investment portfolio.

From Collector to Dealer

Most stamp dealers start out as collectors. Over time, many shift their focus from collecting for enjoyment to buying and selling for profit. For many dealers, stamps are a business, not a hobby. Personally, I still maintain a collection, but I view it more like an investment portfolio than a traditional hobby.

Understanding the Difference Between Collecting and Investing

The Joy of Collecting

Collectors are driven by personal interest. They may focus on specific countries, themes, or historical periods. The thrill lies in the hunt for missing pieces, completing sets, and preserving stamps that hold sentimental or historical value.

The Strategy of Investing

Stamp investors approach the hobby with a different mindset. Their decisions are based on market trends, historical price data, and supply and demand. Emotional attachment takes a backseat to potential financial return.

What Makes a Stamp a Good Investment?

Condition Is Key

A stamp’s condition significantly impacts its investment potential. Perfect centering and lack of damage can elevate the value of even common stamps. For instance, a normally $1 stamp graded at 100J—signifying jumbo margins and flawless centering—can fetch up to $900. Only two such examples of this grade are known to exist worldwide.

The Impact of Printing Quality

Before the 1940s, stamp printing was less precise. Well-centered stamps from that era are rare, which enhances their value. A single undamaged example of a rare stamp can sell for twice as much as a damaged one.

Rarity vs. Scarcity

Rare stamps exist in very limited numbers. Scarce stamps may be common overall but are hard to find for sale. A good investment stamp is usually either rare or scarce—and in top condition.

Market Forces: Supply, Demand, and Popularity

Popular stamps in excellent condition are more likely to retain and increase in value. For example, Scott No. 1 is rare and highly sought after. A damaged copy might sell for under $200, while a well-centered, undamaged version could command $500 or more.

Popularity also plays a role. A rare stamp that appeals to a wide range of collectors is easier to sell and more likely to appreciate in value. On the other hand, a rare stamp with niche appeal may struggle in the market.

Certification and Grading

Certified and graded stamps offer investors a way to verify condition and centering. Certification reduces the risk of surprises when buying or selling. For instance, I often reference the PSE (Professional Stamp Experts) website to look up values for graded stamps.

Understanding SMQ Values

Graded stamps have SMQ (Stamp Market Quarterly) values. Because most auction houses charge around 20% in commission, I typically estimate retail value at around 80% of the SMQ. A stamp valued at $100 on SMQ will realistically sell for about $80 to the seller after fees.

My Personal Investment Rules

1. No Damage: I only invest in stamps that are completely free of damage.
2. Condition over Centering for Older Issues: For rare 19th-century stamps, I prioritize sound condition, even if centering is slightly off.
3. Modern Stamps Must Be Both Sound and Well-Centered: Printing standards improved post-1900, so high-quality examples are more common and more important.

Highlights from My Investment Portfolio

Scott No. 131 – 1869 30¢ Pictorial Reissue

Grade: 85 (Very Fine to Extremely Fine)
Condition: Unused without gum
SMQ Value: $1,500
Initially graded 80, later upgraded after reconsideration. A well-centered, sound example from a popular set, making it a strong investment piece.

Scott No. 220c – 1890 Small Banknote (Cap on Both Twos)

Condition: Mint, original gum, sound
Catalog Value: $650
Used versions are worth only $30, showing how condition and variety can boost value.

Scott No. 245 “$5 Columbian” 1893 High-Value Issue

Grade: 90
Condition: Mint, lightly hinged
Value: $4,500
Extremely fine and highly desirable from a famous U.S. commemorative set.

Scott No. 292 – “Cattle in the Storm” (Trans-Mississippi Issue)

Grade: 90
Condition: Mint, lightly hinged
Value: $1,800
Considered one of the most beautiful stamps ever produced by the U.S. Post Office.

Scott No. 294 – Inverted Ship Error

Condition: Sound, almost very fine centering
Value: $12,500
A famous error issue that remains in high demand among collectors and investors.

Scott No. 583 – Common Stamp, Perfect Centering

Grade: 100
Value: $1,250
Catalog value is only $6, but perfect grading makes it the only known example at this level.

Scott No. 619 – A Diamond in the Rough

Grade: 100J
Value: $625
Found in a casual collector’s album, this stamp stands out due to its flawless centering.

It’s entirely possible to be both a collector and an investor. For me, investing makes the most business sense since I need to sell stamps to keep my operation running. If you’re more interested in financial return than personal attachment, stamp investing might be a better path for you.

If you found this information helpful, be sure to check out more of my content on identifying rare stamps, collecting tips, and philatelic history.

Until next time—best of luck and happy collecting!