Jewellery Investment – Is it worth it?
Whether you want to make a very special and valuable gift to someone or bet on something other than stock, jewellery investment is one option to consider. It’s absolutely correct that you get better value if you spend a small fortune on a diamond ring than a getaway. It’s not necessarily true that you would be able to sell your engagement ring for more than you paid for. Although people like to believe that a piece of jewellery would cost more over time, this rarely happens. This is simply because once used, it has second hand value. With usage and as time goes on, the piece might become damaged or go out of fashion.
But before you buy any jewellery hoping its value would increase over time, bear in mind that ready to wear jewellery and gold, platinum and diamonds differ in commercial value. While the price of a fancy piece might even decrease with time, prices of gold and diamonds tend to increase. Because they are exhaustible resources originating from a select few suppliers, it’s not surprising that their prices have been increasing over the decades.
The investment potential of the piece depends on a few key factors:
Quality – it is important to acknowledge the quality of the stone, material and craftsmanship. Beauty and brand labels might add up to the value, however the quality is what would be substantial to the end price. To make the best jewellery investment possible, educate yourself, research and be patient.
Cost price – like with real estate, jewellery investments need to be well-timed. Once you know what makes a good diamond, buy when experts advise it’s a good time to do so and sell when prices go up. Before purchasing, research, wait and eventually take a risk. In the worst case, you would end up owning a stunning piece of jewellery, how bad can that be? As the graphs above show, sometimes prices of gold diamonds fall, but return and exceed their high points. Unfortunately, there are no universally correct advice on jewellery investment and seeing the desired increase in gold or diamond prices can take decades.
Maintenance cost – unlike with real estate and vehicles, maintenance cost is irrelevant with jewellery. If you store the piece properly, an annual inspection and polishing is the only maintenance you need to consider.
Value and desirability over time – the most important factors to consider when buying jewellery as investment. Purchasing an expensive, quality antique piece almost guarantees its value would increase over time. Unfortunately, rare diamonds and historically significant pieces dictate very high prices and are not an option to most beginner investors. However, depending on the piece, you might actually be paying for the label, marketing and advertising. If a new designer or an artist is currently trendy, that doesn’t mean their products would be valuable in the future. This example may be an overkill, but would a pair of Yeezys cost more and have a better value than a Louis Vuitton suitcase 10 years from now?
As we mentioned, a good quality piece of jewellery is most definitely a good investment, to become that sentimental piece to pass down to next generations. Like all investments, it could be risky and you could be promised much but without any guarantees.
The safest, time-tested analysis shows that investing in bullion, gold coins, loose diamonds and precious stones is the way to go. If you can afford it, buying already desirable and historically valuable pieces, such as Faberge Eggs or large stones also means you could resell it for a higher price. Another way to benefit from gold price increase is investing in gold related businesses. Such as mining. To make the most of your antique jewellery investment, buy second hand pieces with personality and from trusted retailers. Always chose something you would love to wear and pass on to the next generation. Whether it would financially pay off with time or not, a good quality piece of jewellery is a must have. It guarantees the pleasure of wearing it and you might actually want to keep it forever.