Gemstones as investments

[Lee Little]

Hi Everybody,
I had a client ask me these questions and would be interested to hear other people's ideas before I respond. Thanks! Lee
1.) What is the potential of investing in gemstones?
2.) Is there any gemstone especially good for investing in?
3.) How does investing in gemstones compare with other investments?

 

[kenny]

We have to buy at retail but sell at wholesale.
So much for the investment.

Buy gems because you love them.

 

[chrono]

We've had this discussion on PS before.
1. Not an easily liquidable asset
2. Not easy to find a buyer
3. Not easy to find a buyer who is willing to pay your asking price
4. No guarantee of price growth. If there is a new strike of good material, pricing will dip.
5. I think there was some sort of rate of return calculation done and the result was quite low.

 

[kee07]

We have to buy at retail but sell at wholesale.
So much for the investment.

Buy gems because you love them.

totally agree
buy at retail and sell at wholesale, at least 10-20% of market value was gone

 

[cm366]

Lee,
Great to see you posting!

Historically, gemstones have been a great investment for portability of wealth and a very unimpressive one for growth of capital. They rarely appreciate (nothing more durable than a rock!) and as Chrono said any new find can cause prices to dip or worse. Investing in fine Amethyst in 1900 or so wouldn't have been very good for the old portfolio!

If your client is worried about having to flee an invading army with whatever they can physically carry, gemstones are an excellent asset. They'll lose 20-30% of their investment immediately given the price differential between retail buyers and private sellers, but those stones will last for generations! Plus, Treasury bills are pretty ugly next to a nice ruby, or one of LD's drool-worthy Paraiba's!

 

[JewelFreak]

Everything above, and if you're planning to flee invading armies, you'd better have diamonds or corundum. If you hid anything else in a pouch under your hoop skirt, the stones would be vulnerable to chipping & scratching, unless your pouch had little individual compartments for each gem.

 

[minousbijoux]

...and if you are planning on eluding invading armies, good luck getting to your safe deposit in time to get them into your possession...