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Monday, February 1, 2010

Stamp Investment Tip: El Salvador 1935 Central American Games Issue (Scott #538-42/C36-40)

In 1935, El Salvador issued a compound set honoring the Third Central American Games (Scott #538-42/C36-40). Only 6,748 of this attractive Sports topical set were issued, and Scott '10 values it unused at $74.50.

Over the last decade or so, a "stealth bull market" has developed for better Latin American material, especially for scarce issues with wide topical appeal. Supplies have been gradually depleted, and many items which formerly retailed for about 20%-30% of Scott are now selling for 60%-80%, and the catalog values have substantially increased as well. Frequently, Michel Values, which are usually much higher than Scott for Latin America, are used by auction houses when listing this material. As the region has cast aside its authoritarian dictatorships and become more democratic, it has experienced healthy economic growth and the concurrent development of a middle class.

El Salvador, a nation of 5.7 million, is a poor though steadily developing economy, which has experienced annual GDP growth averaging 3.5% over the last 5 years. In addition, there are between 500,000 and 1 million Salvadorans in the U.S., most of whom immigrated during El Salvador's "Dirty War" of 1979-92. Salvadorans in the United States are among the hardest-working immigrants, working enough hours at low-paying jobs to send about $800 million home every year. Although Salvadoran Americans toil in the lowest-paying sectors of the American economy, they are slowly but inexorably becoming more prosperous. They work long hours, save a great deal, and are gradually moving from the inner cities to the suburbs.

While I believe it may take a while for a significant stamp collecting population to develop among Salvadorans, this is mitigated by the fact that many collectors of Latin American stamps collect the region generally, rather than specializing in a particular country. Also, the quantity issued for this Central American Games set was so low that growth in Sports Topical collecting alone may be sufficient to push it upward.

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