The Gem Investment April 27 2017

Precious gemstones have served as vehicles of value for millennia. Sapphires, diamonds, emeralds and rubies are great choices as investment alternatives to the stock market or sports memorabilia; their intrinsic value remains relatively stable over time and do not burden you with hundreds of dollars of storage costs. These gemstones are attractive and are always in demand and so, being armed with a few investment tips and a bit of patience, can easily protect the wealth you’ve earned.

When purchasing gemstones as an investment, you often make your money when you buy them! More often than not, the average rate of return you can come to expect from a gemstone is the rate of inflation unless it has a unique and special history to its name based on past ownership. As a result, in order to lock in a return that is worth the risk you are willing to take, gemstones would need to be purchased below the retail price you intend to sell them at. This would involve finding primary wholesalers (those who are in the business of mining gemstones), secondary wholesalers (those who act as intermediaries between the primary wholesaler and the retailers) or open market auctions through estate sales and pawnshops to make your purchase.

Making the purchase is just as important. Consulting with a trained professional who has an eye out for the value of a gemstone is highly advised as it will determine the quality of the gemstone you are going to purchase. Each sapphire and diamond is unique and so being able to ascertain slight differences in their cut, clarity, color and carat size will help ensure that you pay the right amount based on an objective appraisal.  Of course, with experience and attention to detail, you too can become an excellent appraiser of gemstone value and this not only help reduce the costs of acquiring professional services but also serves as a great skill you could use to impress your friends at a cocktail party!

Once you’ve purchased your gemstone and you are ready to make the sale, it is unlikely that you can go into a store and get the prevailing market price like it is for gold and silver. Gemstones are simply not readily liquid as its value is determined by a variety of factors that need careful examination such as its quality and the amount the buyer is willing to pay. Instead, you will have to organize and handle all the logistics and negotiations of the trade with other willing buyers, auction houses or stores. The upside of this autonomy is that you have the choice to add value to the gemstone you are selling. Utilizing a reputed lapidary or gem cutter to re-cut, re-polish or establish a setting will help generate a return far in excess of your initial cost base and pave the way to grow your investment.

In essence, gemstones are excellent alternative investments and serve as a class of assets that can help you diversify and protect your wealth. As is with most things, the more you understand about gemstones you will be investing in, the easier it will become to grow and consolidate your portfolio. It is very much like running your very own business than investing in a financial instrument, so enjoy the ride and good luck!


Liquid error (templates/article line 21): Could not find asset snippets/relatedblogs.liquid