Gemstones have been considered good investment for a long time. It has always been the symbol of richness and prosperity.
The most famous Brazilian red diamond (also the most famous red diamond) is a 0.95 carat round brilliant known as the Hancock Red, named after Mr. Warren Hancock, a notable connoisseur of colored diamonds, who began collecting these rarities in the early 1950s until his death in 1981 at the age of 65. While he also owned several other notable colored diamonds it was his 0.95 carat red stone (originally bought for $15,000) that made news when it sold at Christie’s in 1987 for $880,000 to the sultan of Brunei.
These are the kinds of stories that fuel the desire to invest into gems. Still, in order to be successful in Gemstone Investing there are a few things to remember.
I. Why is it worth investing into gemstones?
1. Gemstones have stable value: As a rule, gems increase in value at least at the rate of inflation but in many cases a much higher return can be realised. Gemstones will always have a stable value to them, unlike paper money, which is only worth what the government tells you it is worth. In other words, it doesn’t have any worth or value of its own, it’s only paper! Gemstones will always have a value! What does stable value mean?
In the year 1865 a man could walk into a store with a twenty dollar gold piece, buy a good suit off of the rack, a leather belt, a pair of leather boots, a good pocket watch and a hat, all for that twenty dollar gold piece. Today, with that same twenty dollar gold piece you have the same buying power that you had in 1865, in that you could still buy a good suit off the rack, a leather belt, a pair of leather boots, a good pocket watch and a hat. The buying power of it has remained the same. Because the twenty dollar gold piece is a hard asset, it will always hold its value.
Colored gemstones and diamonds, similarly to precious metals, constitute stable value property that can play important role in a portfolio as a middle or long term investment. In case of those investments (including precious metals as well), that can be influenced by manipulations in the stock exchange, risk factor is quite high. Fortunately gemstones are out of the scope of stock exchange so their value won’t depend on brokers’ tricks. The value of a gemstone depends on its beauty, rarity and popularity.
2. Value of gemstones will increase drastically in the future: The world’s supply of natural gemstones is limited to what already exists. No more is being made as it takes millions of years to create a gemstone naturally. Many of the large producing mines of the world are already mined out, or nearly so. Although there are new discoveries, even these are limited supplies and will eventually be depleted. As the world’s population increases, so will the demand. Once it was only the elite that owned gemstones, but now everyone wishes to own (and can afford) natural gemstones. As we move into the future, I can only see natural gemstones going up in value.
3. Gemstones can be easily mobilized: Gemstones are the most portable among all the assets, they fit into a small place and can not be detected by metal detectors on airports. One can carry his entire fortune in his pocket; we can not tell that about any other type of assests. They are the super concentrated form of wealth which can be stored or concealed with utmost privacy.
II. What kinds of gems are good investments?
1. Well known, classical gemstones: If a gemstone is popular it is easy to resell, so your investment capital can return fast. It is not needed to introduce the classical gemstones as these are well known by everyone: sapphire, emerald, ruby, diamond, and the smaller classical ones: aquamarine, morganite, tourmaline, topaz. There are also some modern, popular gemstones that have gained reputation lately, such as tanzanite, andalusite, tsavorite, spinell, demantoid.
2. Rare gemstones: Generally speaking, the fewer mining sources a gemstone has means that the chances of a particular gemstone being in limited supply are greater. Such is the case with tanzanite, Mandarin garnet and Paraiba tourmaline to name some of the most popular rare gemstones. Other “rare” gemstones that are available for investment purposes are benitoite (as the mine is now closed), bastnaesite, pink apatite, imperial topaz, padparadscha sapphire, enstatite, color change garnets, demantoid garnet, contra luz opals, Mali garnets, mint green garnets, grossular garnets, chrome tourmaline, natural colored diamonds and sphene just to name a few. The rarer the gemstone the more sought after it will become.
III. How to invest into gemstones?
To provide a healthy return on investment keep in mind a few things:
1. The most important strategy: buy as low as possible. The greater the difference between wholesale and retail, the better your chance is of making a profit. It is also easier to find buyers for lower priced goods. However, it may be easier to find 25 buyers for $200 stones than one for a $5,000 gem, but it might not be easier to find 5,000 buyers for a one-dollar stone.
2. Buy only good quality gems.
3. Don’t buy small gemstones (less than 1 carat) except for the really rare collectible gems.
4. Buy only nicely cut and polished gems.
5. Buy only natural, untreated gemstones. However in case of some gemstones simple heat treatment can be accepted.
IV. Why is it worth buying your gemstones from us?
1. You can buy from us for a relatively low price: The average seller or jeweller would sell a gem for 2-3 times higher price than what its retail price is although he bought it for half of this retail price. Let’s just look at an example. The consumer buys a diamond from a jeweller for $11,000 and decides in a month that he wants to sell the stone. Real buyers know that $7,000 is the usual cost when they are looking for stock supplies of such stones. It is nearly impossible for a consumer to find a buyer who needs that particular diamond on the day the consumer wants to sell it. The reality is that you would be doing well to clear $5,000 to dump this $11,000 diamond on a given day you want to sell it on.
As we buy our gemstones directly from “primary” sources, who mine and cut the stones themselves, their prices are not increased by the different kinds of wholesalers and retailers markups. Moreover we do not have a shop so we don’t have to spend fortunes for its maintenance. This means that we can give part of this saving to our customers.
2. Safety: There are many synthetic and lab-created gemstones in the market. Many people all around the world are victimized in gemstone forgeries only because of the fact that they are not equipped with sufficient information for making intelligent investment decisions. A buyer must be very careful to choose who to buy from and what to buy. Our experts are professional gemologists so they can offer gemstones whose origins are unquestionable.
V. Investment types
1. Personal portfolio: Buyer can decide how much money he wants to invest into what kind of gemstones.
2. Professional portfolio: Client decides how much money he wants to invest but he is not sure how many and what kind of gemstones make a good portfolio so he trusts us in creating a collection for him.
3. One-off investment: Investor wants a onefold investment into gems; he can choose between personal and professional portfolio.
4. Collecting: The investor purchases gemstones more than once or regularly, alone or with our help.
If you have any questions concerning investment gemstones or making a professional portfolio please contact us.