Research Tips when investing in gemstone and jewellery pieces

Research Tips when investing in gemstone and jewellery pieces

Disclaimer - We do not give any financial advice or recommendations on how you should invest.‌‌

Precious jewellery pieces should not go under the radar as valuable investments and are worth researching and looking into, for anyone looking to invest their capital into tangible alternative assets.‌‌

We are going to highlight some key things you need to look out for in a bite size and concise format so you have a punch sheet of things you need to know and do when considering these potential investments.‌‌

What is your Why?‌ ‌

You need to identify why you are considering buying jewellery. These are extremely long term investments if you want to see any real appreciation value, so quick money should not be the objective. In addition jewellery is wearable art you want to enjoy what you buy. It might even be something that you pass down the generations as cherished family heirlooms.‌‌

The one main advantage of buying jewelry is that it is an extremely portable tangible alternative asset. Unlike gold where you can only carry so much in person; with jewelry you could potentially have millions of dollars in your pocket.‌‌

Sourcing experts‌‌

Unless you are well networked in the industry and are knowledgeable on a granular level in jewelry, don’t go at it alone. Especially if you are investing substantial amounts of money.‌‌

Experts should be sourced from associations and reputable bodies such as the GIA and others. Make sure to verify peoples credentials to avoid any potential fraud.‌‌

Buying experts, similar to the art market, are quite well networked and are known in the industry. So you would be able to observe the expert's reputation amongst his peers. Also it helps in showing the vendors you are serious as well.‌‌

Focus on what you can sell ‌ ‌

When investing in jewellery you want to focus not on what to buy, but what you can sell easily. This involves knowing how the auction houses work; an example of this would be, that auction houses only take branded goods and gemstones that have to be set in jewellery. So with this information you know you should focus on buying branded jewellery. So look at the most reputable jewellery maisons, such as Graff, Bvlgari, Van Cleef & Arpels and Cartier to name a few.‌‌

Examples of this would be Graff’s ‘Royal Star of Paris’ or Van Cleef & Arpels ‘Rose Marine’.‌‌

Royal Star of Paris - Source - Graff DIamonds
The Rose Marine - Source - The Jewellery Editor

Understand the components of the jewellery

More than the jewellery pieces themselves; it is important to know their components, as they are valuable gemstones and precious metals that can impact the value of the piece. For example, jewellery made from gold or palladium benefits when these components go up in value. ‌‌

When it comes to gemstones high quality diamonds, emeralds, rubies and sapphires should be the focus. ‌‌

The quality of gemstones has to be understood well, you need to know that emerald, rubies and sapphires that are untreated but are vivid with a rich color and little inclusions are sought after. Also the size is important; the larger the stone the more valuable, BUT it has to have the other components mentioned earlier to be considered rare, as a large stone with many inclusions may not be as valuable as a smaller stone that is untreated, vivid and has no inclusions.‌‌

A good template for understanding a value of a gemstone is using the 4C’s:‌‌

Color: The color of a gemstone is one of the most important factors in determining its value. Gemstones come in a wide range of colors, and different colors have different levels of desirability. For example, in diamonds, colorless or near-colorless stones are generally considered more valuable, while in colored gemstones, vivid and intense colors are often preferred.‌‌

Clarity: Clarity refers to the presence of any internal or external flaws, known as inclusions and blemishes, respectively. Gemstones with fewer or no visible inclusions or blemishes are considered to have higher clarity and are generally more valuable. The clarity grade of a gemstone is determined by the size, type, location, and visibility of these flaws.‌‌

Cut: The cut of a gemstone refers to how well it has been fashioned from the rough material into a polished gem. The cut affects the gemstone's brilliance, sparkle, and overall appearance. A well-cut gemstone will maximize its ability to reflect and refract light, resulting in enhanced beauty. The cut quality is determined by factors such as proportions, symmetry, and polish.

Carat Weight: Carat weight measures the size or mass of a gemstone. It is often a significant factor in determining its value, as larger gemstones are generally rarer and more valuable. One carat is equivalent to 200 milligrams. However, carat weight should not be confused with size, as different gemstone types can have varying densities and weights even at the same carat weight.

Jewellery pieces with a history

With classical jewellery and well known pieces you have the advantage that they have a track record; you can see what they were bought and sold for. This can help you in the analytical aspects of knowing the piece's appreciation value over a period of time. Contemporary or new productions don’t have resell data so a different approach has to be taken when evaluating them.

Conclusion

Remember this form of alternative investing has its advantages and is extremely fun, but do bear in mind that it is a long game and you really need to be well researched and ideally well networked before you make any big buying decisions.‌‌‌‌

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