Ex-Post

The Investment Performance of Collectible Stamps

E. Dimson, C. Spaenjers

Research output: Working paperDiscussion paperOther research output

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Abstract

This paper investigates the returns on British collectible postage stamps over the very long run, based on stamp catalogue prices. Between 1900 and 2008, we find an annualized return on stamps of 6.7% in nominal terms, which is equivalent to an average real return of 2.7% per annum. Prices have increased much faster in the second half of the 1960s, the late 1970s, and the current decade. However, we also record prolonged periods of real depreciation, for example in the 1980s. As a financial investment, stamps have outperformed bonds, but underperformed stocks. After unsmoothing the returns on stamps, we find that the volatility of stamp prices approaches that of equities. There is mixed evidence that stamps are a good hedge against inflation. Once the problem of non-synchronous trading is taken into account, stamp returns seem impacted by movements in the equity market.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages25
Volume2009-64
Publication statusPublished - 2009

Publication series

NameCentER Discussion Paper
Volume2009-64

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Investment performance
Equity
Hedge
Depreciation
Real returns
Inflation
Equity markets
Non-synchronous trading

Keywords

  • Alternative investments
  • Indexes
  • Long-term returns
  • Market model
  • Stamps

Cite this

Dimson, E., & Spaenjers, C. (2009). Ex-Post: The Investment Performance of Collectible Stamps. (CentER Discussion Paper; Vol. 2009-64). Tilburg: Finance.
Dimson, E. ; Spaenjers, C. / Ex-Post : The Investment Performance of Collectible Stamps. Tilburg : Finance, 2009. (CentER Discussion Paper).
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abstract = "This paper investigates the returns on British collectible postage stamps over the very long run, based on stamp catalogue prices. Between 1900 and 2008, we find an annualized return on stamps of 6.7{\%} in nominal terms, which is equivalent to an average real return of 2.7{\%} per annum. Prices have increased much faster in the second half of the 1960s, the late 1970s, and the current decade. However, we also record prolonged periods of real depreciation, for example in the 1980s. As a financial investment, stamps have outperformed bonds, but underperformed stocks. After unsmoothing the returns on stamps, we find that the volatility of stamp prices approaches that of equities. There is mixed evidence that stamps are a good hedge against inflation. Once the problem of non-synchronous trading is taken into account, stamp returns seem impacted by movements in the equity market.",
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Dimson, E & Spaenjers, C 2009 'Ex-Post: The Investment Performance of Collectible Stamps' CentER Discussion Paper, vol. 2009-64, Finance, Tilburg.

Ex-Post : The Investment Performance of Collectible Stamps. / Dimson, E.; Spaenjers, C.

Tilburg : Finance, 2009. (CentER Discussion Paper; Vol. 2009-64).

Research output: Working paperDiscussion paperOther research output

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N2 - This paper investigates the returns on British collectible postage stamps over the very long run, based on stamp catalogue prices. Between 1900 and 2008, we find an annualized return on stamps of 6.7% in nominal terms, which is equivalent to an average real return of 2.7% per annum. Prices have increased much faster in the second half of the 1960s, the late 1970s, and the current decade. However, we also record prolonged periods of real depreciation, for example in the 1980s. As a financial investment, stamps have outperformed bonds, but underperformed stocks. After unsmoothing the returns on stamps, we find that the volatility of stamp prices approaches that of equities. There is mixed evidence that stamps are a good hedge against inflation. Once the problem of non-synchronous trading is taken into account, stamp returns seem impacted by movements in the equity market.

AB - This paper investigates the returns on British collectible postage stamps over the very long run, based on stamp catalogue prices. Between 1900 and 2008, we find an annualized return on stamps of 6.7% in nominal terms, which is equivalent to an average real return of 2.7% per annum. Prices have increased much faster in the second half of the 1960s, the late 1970s, and the current decade. However, we also record prolonged periods of real depreciation, for example in the 1980s. As a financial investment, stamps have outperformed bonds, but underperformed stocks. After unsmoothing the returns on stamps, we find that the volatility of stamp prices approaches that of equities. There is mixed evidence that stamps are a good hedge against inflation. Once the problem of non-synchronous trading is taken into account, stamp returns seem impacted by movements in the equity market.

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KW - Market model

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Dimson E, Spaenjers C. Ex-Post: The Investment Performance of Collectible Stamps. Tilburg: Finance. 2009. (CentER Discussion Paper).