When it comes to investments, there are a lot of options to choose from. You can invest in stocks, real estate, 401K, and even cryptocurrency.
However, one investment option that you may want to consider is jewelry, but only if you purchase the right kind.
Are there any kinds of jewelry that make a good investment?
In this article, we’ll explain what types of jewelry make for a good investment. We’ll discuss what makes jewelry valuable and compare it to the value of the raw materials.
Table of Contents
What Makes For A Good Investment
Investing is risky for those people who don’t really know what they are doing or who cannot detect important changes in the political climate of their own country.
Our investments are only as valuable as the stability of our country.
If you have discretionary money to invest, then you can hire a consultant, listen to what your dad or friends advise, or think outside the box for yourself when all is said and done.
Many people forget to gauge their investing for both the short term as well as the long term, meaning, they do not expect to be able to realize any profit until decades later from the time that they have begun to fund it.
We often hear that gold and/or silver is a hedge against inflation, yet we have seen what silver has done, or failed to do, for the last ten years while inflation continues to skyrocket.
Someone who thought they would realize a gain on their silver bars or rounds is pretty dissatisfied right about now and they will suffer a huge loss if they needed to sell their investment.
What about jewelry, is there any of it that can make a good investment?
The nice thing about owning investment jewelry is that you have the fun of wearing your investment much the same way that women in India wear their wealth in the form of many 22K gold bracelets and necklaces.
Wearing gold bars would feel a bit cumbersome, so instead, we use gold coins and make rings, bracelets, necklaces and even earrings out of them so the coins don’t just sit in our safe unappreciated.
That said, we believe that a good investment is one that you can hold in your hands rather than allowing it to be in the control of someone else’s hands or in cyberspace.
We believe that a good investment does not have to be for the long term only, but should be able to be used at any point during the timeline of your life.
We believe that a good investment should be able to be handed over to whomever you want to have it without having it fall into the complexities of a family feud, a greedy Estate Attorney, or a Probate court.
We also think that a good investment is one that can rise above the political and economical disasters that can happen suddenly in any country.
Here are a few more considerations:
Investment Returns
When you make an investment, you obviously want to get a return on that investment.
And with jewelry, you can get a return in a few different ways.
The first way is through the appreciation of the piece.
Just like any other asset, jewelry can go up in value over time. This is especially true for antique and vintage pieces.
The second way to get a return on your jewelry investment is through the resale value.
If you ever need to sell your jewelry, you can usually get a good chunk of your money back, especially if you’ve taken good care of it.
Asset Appreciation
We want our assets to appreciate in value.
Sometimes they just seem to go nowhere and this can make us feel rather foolish.
An asset that does not appreciate is not really an investment. Your car, for example, does nothing but depreciate the minute you drive it off the lot. The same goes for clothing and other items that are subject to wear and tear.
But jewelry is different.
Jewelry can appreciate in value, meaning it’s worth more today than it was when you bought it.
Cash Flow
Investments that can add to your cash flow make for a more enjoyable life. If your investments are only for the long term, you have to wait a long time to enjoy the fruits of your labor.
If you purchase a rental property, you can immediately enjoy the cash flow from the rent payments.
The same goes for a business that you own and operate.
While jewelry is not something that is typically leased out or generate a business, it can be sold to generate cash flow if needed.
Diversity
It is always a good idea not to put all of your eggs into one basket.
Your investment portfolio should, if possible, consist of several different types of assets that can be used for both short and long term needs.
Ever hear the phrase, “elections have consequences?”
Every two years, and every four years, the United States holds elections for seats that can entirely change the prosperity of our country.
The person sitting in the White House, in Congress and the Senate, and our Governors will have a huge impact on our local and national economy.
These officials can change the entire landscape of our lives by the stroke of a pen and so being able to weather one type of economic downturn, while at the same time making up for it with another, is key.
This is why we are often told by investment experts to diversify.
Gold jewelry, as well as gold coins, is one way to put a portion of your discretionary cash into that portfolio while still being able to enjoy it at the same time.
Is Jewelry A Good Investment?
Now that we’ve looked at some of the things that make a good investment, let’s take a look at whether or not jewelry fits that bill.
As we mentioned before, jewelry can appreciate in value over time. This is especially true for antique and vintage pieces.
So, if you’re looking to invest in something that has the potential to grow in value, jewelry might be a good option.
What Makes Jewelry Valuable
Because jewelry is made of precious metals and gemstones, it has a intrinsic value that is determined by the market price of these raw materials.
When you buy a gold necklace, for example, you’re paying for the gold that it’s made of.
The same goes for silver and platinum jewelry.
And, if the piece is studded with diamonds or other precious gemstones, you’re also paying for those.
Beyond the material value of what the jewelry is made of, jewelry also holds sentimental, historical and aesthetic value.
This is why some pieces, like antique rings or family heirlooms, can be worth much more.
Which Jewelry Is A Bad Investment
Diamonds are not a good investment.
Neither are colored gemstones that have been treated in any way.
The Media seems to lead and prop up a commodity to invest in, such as the constant pounding several times per year regarding diamond jewelry.
You can see this happen like clockwork on Mother’s Day, Valentines Day, Christmas and as suggested for Anniversaries.
It is for this reason that so many buy diamonds thinking that this is a fantastic investment, but truth be told, it is the more rare gemstones such as natural untreated mined rubies, sapphires, emeralds and alexandrites that are more valuable, carat per carat.
Even though these natural untreated gemstones are far more valuable than are diamonds, it is still difficult to try and sell them to a jewelry store if you need money.
The reason for this is because there are so few buyers who can afford the high prices that these command in the average stores.
Couple that with the fact that gemstones that have been artificially treated by heating and fracture filling to enhance their appearance since the 1960’s have flooded the market.
People simply do not know how to tell a good quality colored gemstone from a poor quality replica.
The result is that the one with the good looks and lower price will sell, and therefore a jewelry store will be more willing to buy those for their inventory.
Gold, sterling silver and platinum that is light in weight is not a good investment either, regardless of the gemstones contained in them.
Which Jewelry Holds Its Value Best
If you want to buy and wear jewelry to diversify your investments, then go for the gold.
Buy higher carat, such as 18K, if possible and make sure it is of heavy weight.
If you need or want to cash in at some point down the road, then you will get the value of that gold based entirely on gram weight and purity.
It is also fine to buy 14K gold, but again, make sure it is of heavy weight.
The other thing to remember is to try and avoid buying hideous looking items, such as heavy gold Class rings and thick rope or Cuban chains, unless you can get them at a good deal just for melt value.
While these may have the weight you’d want, a jewelry store will know in an instant that they will have no chance to resell these items and will pay you much less for them than they would if the items were timeless, elegant and attractive.
- Gold coins set in heavy bezeled necklaces and heavy gold coin bracelets are also something to buy. While these lose the additional pneumatic value because of scratches due to wear, they will hold and increase in gold value. Any gold coin jewelry that are high carat and are elegant looking, a jewelry store would be happy to add these to their inventory.
- Buy antique pocket watches and high end watches such as men’s Rolex, Patek Philippe, Hamilton and the like. These will be heavy in gold content and useful at the same time. Men have an affinity for these kinds of watches, especially if they are vintage. Do not buy women’s high end Rolex watches, but instead, buy the heavy gold bangle bracelets and heavy wide Omega collar chokers. Buy an equal amount of white gold and yellow gold so that you can offer a buyer a choice, but whatever you do, buy heavy.
- Gold nugget jewelry, or just gold nuggets in general. Everyone is enamored with gold nuggets in the raw. Buy them!
FAQ’s About Investing In Jewelry
Why diamond has no resale value?
Diamonds are not rare and the jewelry stores that buy them pay wholesale for them.
Even so, they cost a jewelry store more money to buy than any other item that is for sale in their store compared to all other types of gemstones.
The diamond must be set up in a mounting if it is going to have a chance to sell. Each month that goes by sitting in the case, the profit shrinks further as time goes by due to the cost of monthly overhead.
If a jewelry store cannot buy your diamond for less than wholesale, they will not buy it at all because they only buy when needed or if they can get a better than wholesale price.
They will instead offer to consign it and try to sell it for you. You can expect to get half of what you paid if it does sell.
Does jewelry depreciate in value?
Gold and platinum jewelry does depreciate in value the minute you drive it off the lot, just like a new car.
However, to be fair, unlike cars, the value of gold jewelry absolutely will be regained over time because the retail value will rise with the gold prices.
If you are taking good care of your jewelry, and if you have chosen to buy items that are both elegant and possess a heavier weight of higher carat gold, then you will get back what you paid for the gold at the very least after 10 years.
If you bought designer gold jewelry, like Tiffany & Co, then the name will also help to get you a few more dollars back.
Why?
Because retail prices keep rising over time, and so does the price of gold.
If you bought a 18K heavy thick bangle bracelet, then all you have to do is wait for the gold price to go up as you wear and enjoy your jewelry.
A jewelry store would be happy to pay you what you paid plus a little more if they think that they can resell it at profit.
At the very least, you would get back the value of the gold weight in it.
What is better to buy: gold or diamond?
If you have to choose between buying gold or a diamond, dollar for dollar always buy the gold!
If you have to raise money in a pinch, then wholesale is the only thing that you might get back for any diamond that you buy, but only if it is a very high quality stone.
In contrast, in 1970 gold was $260 an ounce, ten years later in 1980 gold was at $2500 an ounce, in 2001 it was $420, and now it is pushing $2000 an ounce.
Wild, but at least you are actually making money on the gold most of the time as opposed to losing half of your investment on a diamond during that entire timeline.
Is diamond a good investment?
We do not recommend buying diamonds as an investment unless you intend to open a retail jewelry store to sell them.
This would actually be the only way that you could hope to make money from buying diamonds.
You must buy low, and sell high, to make money on anything at all.
Jewelry stores are forced to buy diamonds because these stones have always been the “go to” gems for wedding rings.
Wholesale diamonds are easy to get, so jewelry stores only buy when inventory is running low or when a customer specifically asks for something that they do not have in stock.
If you, as a jewelry store, paid $10,000 for a nice diamond, then you can expect to eventually sell it for $15,000 retail, but only if the mounting is spectacular.
What do you suppose that the spectacular mounting is going to cost you by the way?
While initially it seems like it would have net a good profit margin, it can take several years to sell and each month you’ll have to pay the overhead business expenses that are eating away at any profit.
There is nothing so wasteful as opening a business and then having expensive inventory sit year after year while you pay a landlord for the use of his building so that you can sell your diamonds.
Final Thoughts
We hope that this article has helped to explain the types of jewelry that make a good investment. Gold and designer jewelry are usually a safe bet, but diamonds should be avoided unless you have a specific plan for reselling them.
Being able to wear your investment is an added bonus to gold jewelry, but don’t expect to get rich quick – the value of gold takes time to appreciate.
With a little bit of research and planning, you can be confident in your jewelry investments for years to come.