Philatelic investments - what is it?

Many people have hobbies, and many of these hobbies can even be profitable. Philatelic investments are one form of hobby that has the potential to make the investor money.While it may not seem like a hobby that could bring a lot of money, stamp collecting and philatelic investments are growing in popularity and can be quite profitable for advanced collectors.

There are a number of advantages of philatelic investments over traditional investments like stocks or bonds. For one thing, stamps are easier to store and transport than other forms of collectibles, like art and the like. Philatelic investments are also a nice alternative to investing in overseas stock in developing countries, which can result in large financial losses due to unstable economies. Investing in rare, foreign stamps can provide investment opportunities from foreign entities without having to risk losing money from it.

How is value determined?
The value of a stamp is determined through supply and demand, similar to most commodities or collectibles. Supply is determined by the stamp's printing quantity, as well as the number of stamps that have been destroyed. This is almost impossible to determine at times, however, so the more reliable form of determining supply is through the printing quantity. The lower the quantity printed, or the rarer the stamp, the more valuable it is said to be.

Demand is determined in a number of ways, including:
- Country where the stamp was issued. Most stamp collector's prefer to collect their own country's stamps, but some collectors will focus on a particular region or area.
- Pictorial appeal. Some collectors prefer to focus on the picture of a stamp or particular collections that feature a topic, such as sports, celebrities, or art. For example.
- Perceptions of value. A person or collector's perception of a stamp's value can also influence the demand for stamps.

If you're considering philatelic investments, a great deal of research and knowledge about stamps and the industry in general is required before you can be profitable from it. This will take a fair amount of time, as you will have to research classification of stamps, various grades of condition and the effect on value, determining authenticity, handling and storing stamps, getting to know and establishing relationships with stamp dealers, clubs, auctions, and shows, as well as learning about the stamp market in general.

The most successful philatelic investors are those who already have a great deal of experience collecting or dealing stamps, as there is a great deal of knowledge required in order to be truly successful.

The main questions a philatelic investor needs to take into consideration before purchasing or selling a stamp include:
- Which countries or areas will have the greatest increase in demand in the long term?
- Which stamps are undervalued and should be targeted for investment potential?

In addition, the collector needs to take the potential for long-term growth into consideration before purchasing a stamp and be able to recognize fads. For example, after Princess Diana died and stamps with her likeness were issued, the prices for the stamp surged and people were spending much more than what the stamp was really worth. After the hoopla died down, the stamp's value went back down. A seasoned philatelic investor would have realized this.

With plenty of research and a passion for stamps, philatelic investing can be profitable and enjoyable at the same time.