Do you ever find yourself gazing enviously at expensive jewelry that graces the necks and wrists of celebrities and influencers? Have you ever considered investing in jewelry as a more tangible asset than stocks or real estate? Or you may just be bartending for a night and had an idea to explore the world of jewelry investment.
Jewelry can be an excellent investment; however, it is essential to understand the costs involved and how practical it will be for your long-term financial goals.
This blog post will discuss whether or not jewelry is an effective investment, outline who should invest in jewelry, and provide tips on how to get started. From learning about various types of jewels, different ways to source them, and strategies for maintaining their value—we will explore all aspects so that you can make an informed decision when evaluating this option.
What do you mean by jewelry investing?
Jewelry investing is the process of buying, selling, and trading jewelry for long-term gains. It involves researching and identifying well-made pieces from top designers that will become doubly valuable over time as collections grow.
For example, an investor will search for a designer necklace or earrings crafted with precious metals and high-quality stones – such as diamonds or rubies – at a reasonable cost since this can offer a greater return on investment when sold later. Furthermore, investors also look out for rare jewelry pieces from top designers to ensure they are in limited supply and, therefore, more valuable.
It is always a good idea to consult a professional before investing or if you need to know your jewelry’s value. Willyn Villarica is the perfect place to take your jewelry that needs an appraisal. Their specialized appraisers are highly knowledgeable and have the tools to accurately report whether or not your piece is made with real gold or diamond and how much it’s worth.
7 Tips for Making a Good Jewelry Investment
1. Learn the basics.
The initial step is understanding the four Cs: clarity, cut, carat, and color. The fewer flaws a diamond possesses, the better its clarity grade. The cut of a diamond determines its brightness; hence the finer the cut, the more brilliant the diamond. Carat is the unit of measurement for a diamond’s weight. The last C refers to the diamond’s color or lack thereof. The most valuable diamonds are colorless or white.
2. Investing in gems requires sales skills.
The majority of jewelers acquire amounts of high-quality material and have it ready. They have strong ties with shops (such as jewelers), who contact them when they have a need. The dealers then submit a selection of stones from their inventory to the jeweler, who chooses one or none for purchase and returns the rest. (This is known as the “memo” procedure.)
In this situation, the jeweler will pay a wholesale price because they already have a buyer. The gem dealer will receive full wholesale since they assumed the risk of holding onto the gem and had the necessary sales channels to sell it when the chance presented itself. This sort of business connection and degree of trust requires sales expertise.
3. Control your cost basis.
You must “buy right.” It is possible to earn from investing in gems, but your cost basis in any individual gemstone must have a built-in profit on the day you buy it. You must have a safety margin. The price paid is the most important aspect in assessing whether an investment will provide a decent return. As with any investment, you must be informed and use great caution and good judgment.
4. Rarity is important.
When an item is rare, its value is more likely to rise over time. This also applies to vintage jewelry, such as unique vintage rings. Ownership of jewelry firms has changed over time, and designs and craftsmanship may differ according to the period in question. Consider Tiffany & Co. as an illustration. Many consumers complained about the quality of the pieces after it was sold to the cosmetics business Avon in 1978.
5. Cheap does not equal value
Buying something for a low price does not indicate that you are getting a good deal or value.
Value is purchasing quality for less money. Consider why a piece of excellent jewelry may be sold at a reduced price. Typically, because the seller desires a rapid sale: they may be a firm with surplus inventory, the police who wish to dispose of recovered items, or heirs who wish to settle an estate as soon as possible. These items are frequently auctioned for far less than their original selling price.
6. Secure your investment.
You must store investment jewelry on something other than your kitchen table. It should be kept in a bank safety deposit box or, at the very least, a secure home safe. Consider this option in particular if your jewelry portfolio exceeds five or six figures.
In addition, if you intend to wear the jewelry, check that it is firmly attached to you and that all the stones are in place.
7. Carefully consider sales avenues.
Always conduct research before investing in jewelry, and have a plan in place for when you need to liquidate the item. Cash Converters and other pawn businesses will never provide the real value of an item. A merchant specializing in antique or vintage jewelry may provide a better bargain than pawn shops, but their high overhead costs will limit the price they can offer you.
Finding a seasoned auctioneer with a history of specializing in the sale of jewels might be a smart strategy to improve results. Your jewelry will be exposed to a larger audience, resulting in a competitive price increase. Even though commissions still apply when selling jewelry at auction, they are often far cheaper than retailers’ markups, and if you have made a wise buy, you can end up with more money in your pocket.
Jewelry Investing: Risks and Rewards
Choosing whether or not to invest in jewelry might take time and effort. Jewelry may be an elegant and opulent complement to any clothing, but it is also a substantial financial expenditure. Before making investment decisions, it is usually advisable to consult a financial counselor to assess the risks and potential returns.
Because jewelry is readily insured and kept, it is commonly seen as a safe investment. However, the value of jewelry can change significantly, making it a riskier investment than others. If you decide to invest in jewelry, do so with caution and ensure that your items are insured against loss or damage. Investing in jewelry may be rewarding for a lifetime if done with careful and extensive research.