The Art of Investing in Gemstones:
The idea of investing in gemstones is not a new phenomenon! From the beginning of time, they have always been items of interest and desire. They have commonly been bought as an investment in hopes of shielding against the economic uncertainties we see during times of political uproar. They are also coveted for their beauty and brilliance, revered for their mystic powers, and highly sought after for their value. At the turn of the new millennium, gemstones emerged worldwide as one of the most popular and sought after ways to invest wisely, and rightfully so! Unlike other forms of investment, gemstones retain their value for centuries. The value of money or currency fluctuates with time, depending upon the whole gamut of the political environment. Gemstones, with their intrinsic value however, outlive all the odds of time to give you a wonderful return when the time comes. Another advantage to this wise investment is their portability! They are easy to hide, move, or store in your own private space without taking up a lot of room.
To hit it off as an investor, one has to do much research about the market. It is also important to understand gemstone quality and the grading system. The precursor to becoming a gemstone investor is developing a love for them. You will hunger for more and more information about them, thus becoming a knowledgeable investor who can make wise choices that will bring you much satisfaction.
Of course you're hoping to make money by investing in them, right?. As with any investment, you need to be very knowledgeable, and exercise a good deal of caution and common sense before making your purchase. The more you know about any investment, the greater the return will likely be for you. If you invest on a hunch, or upon the advice of a friend who may have limited knowledge of the item you are investing in, the less likely you are to profit. This holds true whether you are buying land, stocks, commodities, precious metals, or gemstones. Take your time! Learn as much as you can about them so you can make the best decision for your financial future
Here is one rule that is good to know when considering gemstones. Usually gems increase in value at the rate of inflation but, of course, there are always exceptions. One good example is blue topaz. Blue topaz used to be rare, thus demanding a very fine price. Now, however, a method was developed to transform the common white topaz into blue topaz, causing the blue topaz to suffer a considerable drop in value. Another exception would be that of tanzanite. Once the primary source for tanzanite closed, the value of tanzanite soared!
Buy the best gemstones that you can afford, buying the best in color and the largest in size. Remember this is for investment!. Buy what you think will increase in value the most. If you only buy the gemstones you like, you may have a good collection of your favorite gemstones but may not have the best growth opportunity. Lacking the predictability of knowing the future value of a gem, your best strategy is to buy as low as possible and sell when the price is at its highest....same as any other investment!
Buy Low and Sell High
Never pay retail for a jewel and expect to sell it for a profit in a few years. Buying low means seeking out wholesale sources, not going to the local mall and buying jewelry when they advertise the big sale of the year. Do some research throughout the market. Find dealers who get their gemstones from mines and cut the stones themselves, and who are willing to sell them to you direct. Eliminating the middleman always increases your profit margin. Remember this as well... you will get a better price by purchasing in bulk rather than a single stone.
A great source for bulk gemstones is the Jewelery Channel. They have a great resource library. You can buy gemstones and find thousands of loose stones including diamonds, tanzanite, opals, saphires tourmaaline and parcels of gemstones.
Always buy from a reputable dealer, one that has been doing business for years. They should stand behind their gemstones with money-back guarantees should you not be happy with your stone or if it appraises low. There are wholesalers in most cities with listings in trade magazines. For the beginning investor, or for the person who is just looking for a good price on jewelry or gemstones, again a good source that we suggest you look at is Once you have gained considerable knowledge of gems, you may want to expand your search to flea markets, pawn shops, and estate sales. If you have more knowledge than the seller, sometimes you can find gems at considerably low prices. You must be able to identify gems, however, to distinguish between natural and synthetic. Be prepared to do a lot of shopping before you find a true bargain! Rough gems and mineral specimens as well as finished jewelry all hold potential for investment. Each of these is specialized, so you should focus your attention on the ones that interests you the most. Other sources for information include: American Gem Society and the International Gem Society Reference Library
Selling gems for a profit is the second consideration. Jewelry stores are a likely source, as are auction houses and online auctions such as E-Bay. Keep in mind that unless you own a business you are not likely to sell at retail prices. You must be prepared to find your own buyers and begin working on strengthening your sales skills if necessary!
Do You Need an Appraisal?
An appraisal is an estimate of a gemstone's value by a third party. It is important to remember that an appraisal is not a guarantee but rather simply an opinion on something's value. It's also important for you to realize that the appraisal industry is not regulated. As always, do your homework before learning to trust someone that appraises your valuables. You will find there are some appraisers who are very skilled and reputable but there will always be those out there with much less experience and knowledge.
In some cases, an appraisal is helpful in building your confidence before deciding to make your purchase. It can also be helpful if you are considering selling an item or want to insure your jewelry. Exercise extreme caution with appraisers who have a commercial interest in the value they assign to the piece. If they offer to buy almost immediately after they examine the stones, do yourself a favor and get a second appraisal! It may be the best decision you make. Take your time before selling, as good offers will always be available.
One problem that consumers have with fine jewelry and gemstones is trying to get something for less than it is worth. This is particularly true with purchases made while on vacation at the mine or near the border. Would you buy from a street vendor in Pittsburg? Buying on the street of Mexico City will give you the same results. A Certificate Is NOT a Guarantee!
In some countries, particularly Japan, all gemstones are sold with a laboratory certificate. A certificate (an identification report) confirms the gemstone's variety and natural origin of the stone. In some countries, a certificate may also include information about where the gemstone was mined based on a study of its inclusions. Although certificates from a major laboratory provide support for your purchase, in many countries, including the United States, there is no official regulation of who can offer a certificate. Some certificates are reliable and some are just fancy letterhead with the signature of some unknown person. Even certificates from reputable labs can be forged. Certificates are a common feature to , especially over the telephone and/or Internet. Never buy a gemstone sealed in a package; never buy a gemstone based on certificate alone; and, finally, never buy gemstones over the telephone if buying as an investment.
Gemstones are not a liquid investment and you should be very wary of anyone who sells them as if they were a security. Offers to repurchase the portfolio at a profit when you get ready to sell should raise a red flag. A certificate issued by a company is only as good as the company itself. A certificate will be of no value if the company is out of business. Bottom line, we're trying to help you buy a beautiful gemstone, not a piece of paper!
Not only is buying a gemstone a good investment, it is also a fun an exciting way pass down something fine and valuable to the next generation. Don't think of your purchase as just an investment; get some enjoyment out of them today, yourself, as well!
Another point to consider is that the lower priced gems receive more of a markup than the more expensive ones, usually being marked up three to five times. For example, when a jeweler orders a stone for a customer, the jeweler himself may have a set minimum price. It doesn't matter what the stone costs, the jeweler typically feels he needs a set minimum price to justify the labor of ordering the stone.
Mid-priced gems are usually marked up 100% between wholesale and retail. As things get more expensive, the markup gets lower. Anyone would gladly accept a 25% markup on a $30,000 alexandrite. The diamond market, however, is so competitive that markups frequently drop below 10%.
Now, consider this from an investment point of view. The greater the difference between wholesale and retail, the better your chance is of making a profit. It's also more difficult to find buyers for higher priced goods.
Don't forget the time-honored tradition of horse trading. A couple gems in your pocket can come in handy in a time of need. Imagine if your car broke down, or you found the framed picture or artwork you've been wanting but it costs $100. If you had a sapphire that you paid $60 for and it's worth $120, the dealer might just take it as a trade and you will have made a profit on your investment!
In summary, buying gemstones or precious metals is not going to make you rich overnight! Just keep in mind that throughout history it still remains one of the most trusted ways to invest for your future, mainly because they do preserve their value so well! Hopefully this article provided you with a few useful tips for turning your gemstone investment into a profitable adventure
How to grade a diamond