General Commentary: Demographic Trends Favoring a Multi-Decade Bull Market in Stamps

In the 2009 StampSelector article "General Commentary: Demographics and the Stamp Market", I described demographic trends which determined whether a particular country's stamps would tend to rise or decline in value. As I am now convinced that various long-term global trends favor a multi-decade bull market for better stamps in general, I've decided to summarize some of the most important of these trends:

1) The Rise of a Global Middle Class: I've noted this trend in several articles, including "General Commentary: When Does a Collector Become an Investor?" The basic thrust of the argument is that democratization and the emergence of a global middle class, especially in rapidly developing countries that were once considered part of the "Third World", is bringing tens of millions of people into the philatelic fold.

2) Global Aging: I described this trend in the article "General Commentary: The Aging Population and the Coming Stamp Market Boom", which notes the tendency of many collectors to begin young, put the hobby on hold for several decades, and then return to it on a more serious basis later in life, implying that the population of stamp collectors will increase as the proportion of middle-aged and elderly people grows.

3) The Growth of the Internet: while there is no substitute for actually examining stamps before purchasing them, the buying and selling of stamps online has grown by leaps and bounds over the last decade. Stamps are a nearly ideal commodity for online trading, as they are small, flat, and easy to scan. While the risk of purchasing overgraded stamps still exists, many venues, including Ebay, give buyers with the right to return stamps for a refund, and may also provide feedback or references. An ever-increasing wealth of accessible information may be found online, as well the opportunity to join collector groups and clubs via social networking. These changes have revolutionized collectibles markets in general, and will continue to do so as more and more people gain Internet access. It is all quite astounding when one considers that only 20 years ago, a collector had to amass a substantial philatelic library in order to have access to information that is now free, that he probably attended only one or two local stamp clubs (if any), and that the only convenient means of disposing of his collection were either by selling it to a dealer or through a stamp auctioneer.

4) Increasing Social and Technological Complexification: the rapid social and technological advances of recent years and the unprecedented dynamism of Modern Society have their drawbacks, including higher levels of stress, anxiety, and depression. Clearly, many in our society suffer from "complexity burn-out," and do well to seek out activities which are refreshingly simple, relaxing, and enjoyable. Stamp collecting has been used as a form of therapy to help handicapped and autistic children, and a charitable organization, "Stamps for the Wounded", promotes stamp collecting among wounded soldiers in hospitals, in order to raise their morale and help them to heal more quickly. Whether as a form of mental health maintenance or simply as recreation, Philately offers an attractive alternative for those who are tired of the noise and inanity of television or video games.

Those interested in learning more about investing in stamps are encouraged to read the Philatelic Investment Guide ($5), available on Kindle, and accessible from any computer.

General Commentary: The Aging Population and the Coming Stamp Market Boom

A 2007 UN Report describes global trends in aging, showing an "unprecedented, pervasive, and enduring" aging of the world population which will have "profound implications on many facets of human life." According to the report, those aged 60 and over comprised 8% of the world population in 1950, and this number increased to 11% in 2007. It is expected to double, to 22%, by 2050.

One of the "profound implications" of global senescence which has not been explored is its probable effect on philately. While no surveys or empirical studies have been done to determine the break-down of the "serious" stamp collecting population by age, it is commonly accepted that people start collecting stamps when they are young, set them aside for several decades, and then return to stamp collecting later in life, when they have the money and time to devote themselves to the hobby as serious collectors.

Consequently, we may expect a doubling of the "serious" stamp collector proportion of the general population in countries which have a substantial middle class. The effect will be less pronounced in less-developed countries. Overall, however, we may expect the global population of serious stamp collectors to swell by tens of millions over the next forty years, and continue to grow as the population continues to age. This will result in a stamp market boom, as a vastly expanded pool of serious stamp collectors competes for a static or diminishing supply of better stamps.

While a "rising tide may lift all boats," in this case, some boats will be lifted higher than others. Clearly, the aging trend should be factored into the equation when analyzing the growth potential of a particular country's better stamps. The UN Report cited above profiles the aging trend with a section that examines how it affects specific countries and areas (at the end of the report). A prudent stampselector might consider targeting issues from countries which have both growing middle classes and rapidly aging populations.

Those interested in learning about investing in stamps should read the Guide to Philatelic Investing ($5), available on Kindle and easily accessible from any computer.