There are many purposes for a stamp collection and there are also many risks that can present themselves.
These are just brief descriptions to give you a place to start thinking, don’t worry; the linked articles elaborate on each subject in greater detail.
Environmental Risks: These include excessive exposure to direct sun light, heat and humidity is hazardous to your collection and can quickly destroy the value. There is a range of things that you can do to control the environmental conditions surrounding your stamps. Some solutions to reduce the risk will cost money while others do not.
Theft: A good bit of risk reduction for this is common sense and some tips from lessons learned. All of the tips boil down to don’t make yourself a target and stay alert.
Current Financial problems: Will the current financial situation affecting the stock market, US and Global economy have an effect on Stamp Collecting? Sure it always will to some extent. When money is flowing well any type of business does well and when money is tight one of the first things to go are hobbies.
During the Great Depression stamp collecting actually saw an increase in activity. People did not have money to spend so they collected current and recent issue stamps, both new and use from their own mail. Of course there weren’t as many stamps issued per year back then.
As with any type of investment, even a hobby. If you keep your head and wait it out. Much like the weather, if you don’t like it today, it’ll be different within a couple days. When auction activity is at a low and sales are down people who are selling may be a little more flexible and willing to negotiate.
Bad deals: Bad deals happen. I separate bad deals from fraud and scams because the purchase may have been a mistake on your part but wasn’t necessarily fraudulent on the seller’s part. “Caveat emptor” (Let the buyer beware). If you are making a deal with someone its really your responsibility to make sure you understand the deal. Make sure you know and fully understand what you will be giving and what you will be getting in return, even if you have to ask and clarify it a couple times. If you don’t feel comfortable with the deal, walk away. You can even ask if there is a return policy or if it’s a private swap of some sort, negotiate a way out within a reasonable amount of time. Sometimes, private deals are harder to reverse than professional or semi-professional sales.
If after the deal is done if you’re feeling like it was a mistake, contact the seller. Unless they gave you some sort of satisfaction guarantee or return policy they are not obligated to renegotiate. However if you’re nice about it and explain your problem they may do something for you.
Over Paying: How do I know if I’m getting the best price? This is always a concern of any collector. The short answer is: Comparison shop on the internet, watch the auctions and keep some notes on the prices for the pieces you are interested in. Then you can make an informed decision based on an appropriate price range and what you are willing to pay.
Use catalogs as a guide but to tell you the truth I never pay Catalog price. Unless it’s something you have to have right now, and I can’t really think of a reason that would be. You have time to wait for the right price. Watch the sales and auctions for a little while and you’ll realize that another one of what you’re looking for will come up soon enough.
Selling: For selling a large collection. This is a balancing act. On one end you have speed and on the other you have price. The faster you liquidate, as in selling it as one big lot, the lower the price will be. Selling the collection piece-meal in small lots or singles will yield the best price.
Trading: Trading is a tough one and there are complexities to large trades. Both parties have to agree up front on how the trade will be handled. One for one items, approximate catalog values… or some other measurement so that both parties are happy and feel that the trade was equitable.
Fraud & Scams:
Fakes & Forgeries are present in the hobby. Some are very clever and some are not. The current sophistication & technology make the fakes harder to detect in some cases. I don’t think you’ll see very many people faking a 12.00 stamp but turning a 12.00 stamp into a 1200.00 (or more) stamp by alteration is something to be aware of.
Investment Scams; You see these all the time in email. I have seen some that are actually legal but I still consider them scams because they take advantage of those that don’t know any better. I saw one a few years ago where you could send away for a framed set of stamps from your birth year framed with a certificate of authenticity for 5 payments of 29.99. What crap! Think about it. A cheap frame and a foam-core back, 5.00 to 10.00 worth of mint stamps, mounts and a couple printed pages. Some might say good profit. I’d call it a rip-off.
There are many legitimate examples of this the illegal ones are even worse. They come through phone calls, US Mail and online, even ads in the local news papers. Check out the people making an offer. If it seems too good to be true then it almost always is. If they won’t give you information about their company, contact information you can verify, or ask you to do anything that does not feel right. Walk away!
On-line and Mail-Order: Many people I know are leery about buying items off the internet but they don’t think anything about calling about and offer or giving their information in the US Mail. The odds of a bad deal or fraud are the same as far as I can tell. Just as I said in the previous sections: know who you are dealing with and what you’ll be getting before the deal is made. Check their credentials or reputations by doing a search on line, contact the better business or chamber of commerce if they claim to be members. If they display the APS or NSDA logo check their membership and reputations.
The last risk well cover on this page will be disasters. How can you prevent them? You can’t that why they are called disasters but you can reduce or mitigate the risks and effect they will have on you by taking some simple precautions. If you have investment quality stamps worth a small fortune keep them in a safe or safety deposit box.
Make sure your inventory is up to date and insurance will cover your holdings. Even if you don’t have any investment quality stamps but do have a huge accumulation with an aggregate value which is a fortune by your standards make sure they are as safe from flood and fire as possible.
Most, if not all renters or homeowner’s insurance policies have strict limits on what they will pay and a valuable collection of any type will not be adequately covered. Collector’s insurance is relatively cheap don’t wait for a problem to find out what your coverage’s are. This is particularly important for large valuable collections and for the investor.