How to Invest in Jewelry

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Contributor, Benzinga
August 29, 2022

When it comes to investing in jewelry, you need to keep a few things in mind. First, it's important to get started as early as possible. The sooner you start investing, the better. Make sure you're investing in quality jewelry. Look for pieces that are well made and have a good resale value. Insure and properly store your jewelry. This step will protect your investment in case of loss or damage. By following these tips, your jewelry investment is more likely to be a wise one.

What Factors Should You Consider When Investing in Jewelry?

Several factors come into play when investing in jewelry.

1.    The quality of the piece: Is it well-crafted? What is it made of? 

You should look for hand-fabricated, custom-made pieces. Machine-fabricated jewelry is not usually of the highest quality. Vintage jewelry pieces are often a good investment along with pieces from recognized brands such as Tiffany, Van Cleef & Arpels, Chanel and Cartier. If considering a ring, look inside the band for a stamp that signifies its origin.

2.    The style: Is it classic or trendy? Will it still be in fashion next season?  

Style is a matter of personal taste as well as what the market values. Investing your time and your money in getting to know what’s hot and what’s not in jewelry should be fun and interesting. Online jewelry industry publications such as National Jeweler and the International Gem Society can help educate you. You can also see what’s selling on jewelry auction sites such as HiBid.  

3.    The stone: Is the stone rare or common? What about color and clarity?

For jewelry with diamonds, assess the large stone or stones first. Understand the 4 “C’s” in terms of quality. Focus on earth-mined diamonds and avoid lab-grown or synthetic diamonds and gemstones since these do not typically hold value over time. Assess a piece with original purchase receipts, Gemological Institute of America (GIA) certificates or other documentation, and obtain a detailed appraisal from a reputable jeweler.

4.    The price: How does the price compare to similar pieces?  

Investing in jewelry, like any other investment, is about building value over time. You will want to invest in a piece that is priced at less than the current market value if possible. That typically means a seller that really wants to or must sell a piece. One strategy would be to work with a trusted jeweler who can provide expertise, advice and assistance in buying an investment piece.

Each of these factors will affect the value of the jewelry, so it’s helpful to take them all into consideration when making an investment. With a little education and research, you can find the perfect piece of jewelry that will be beautiful and valuable for years to come.

How to Find the Right Jewelry for You

As you search for the right jewelry to invest in ask yourself a few questions. What type of jewelry are you interested in? Rings? Bracelets? Watches? Is it something that you would like to wear daily or only wear on special occasions? If you plan on wearing the jewelry on an everyday basis, then you will need to make sure that it is made from high-quality materials that can withstand regular wear and tear. On the other hand, if you only plan on wearing the jewelry on special occasions, then you may be able to get away with investing in more delicate pieces that may be of lesser value.

In addition to knowing the type of jewelry you want to invest in, you also need to think about your budget. How much money are you willing to spend on a piece of jewelry? If you are working with a limited budget, then you may want to focus your search on pieces made from less expensive materials such as sterling silver or costume jewelry. However, if money is less of an object, then you can indulge in more luxurious pieces made from gold or platinum featuring high-quality diamonds. Regardless of your budget, investing in quality jewelry can be a wise decision that pays off over time.

What Type of Jewelry is Best Suited for Investment?

Certain categories of jewelry tend to be good investments. One example is natural or earth-mined diamonds whose value usually goes up over time. Diamonds also have a wide range of price points, so they can be a good investment for people with different budgets. Just be aware that lab-grown or synthetic diamond prices have been coming down dramatically in price over the last few years and are likely not a strong investment option.

Certain categories of jewelry tend to be good investments. One example is natural or earth-mined diamonds whose value usually goes up over time. Diamonds also have a wide range of price points, so they can be a good investment for people with different budgets. Just be aware that lab-grown or synthetic diamond prices have been coming down dramatically in price over the last few years and are likely not a strong investment option.

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Diamond price changes from 2019 to the present. Diamond Index shows growth in value of diamonds over last four years

Another type of jewelry that can be a good investment is watches. Watches can be rare, and their value can increase over time. Watches also tend to have a high resale value, so they can be a good choice if you're looking to sell your jewelry in the future.

Gold is another option that can be a good investment. Gold tends to hold its value well, and it's relatively easy to buy and sell gold jewelry. However, the price of gold can fluctuate quite a bit, so do your research before investing in this precious metal.

Is Investing in Jewelry a Hedge Against Inflation?

For some investors, gold and silver as precious metals represent a hedge against inflation. In times of volatility in the stock and bond markets, they seek an asset that holds its value as currencies and equities fluctuate. However, investing in gold or silver jewelry is not a particularly liquid asset. It’s about investing in something you enjoy and still building value over time.

How to Care for Your Jewelry So That it Retains its Value Over Time

Your jewelry is an investment. Whether it was handed down to you or it's something you bought for yourself, you need to take care of it so that it retains its value. First, you should get insurance for your jewelry in case something happens such as loss, theft or damage.

You should make sure you're keeping your jewelry in a safe place. A jewelry box or a safe deposit box are good options.

Clean your jewelry regularly. You can either take it to a professional or clean it at home using mild soap and water. By taking these steps, you'll help ensure that your jewelry retains its value over time.

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Alt Text: Home safe for storing valuable jewelry items

The Risks and Rewards of Investing in Jewelry

Deciding whether or not to invest in jewelry can be a tricky proposition. Jewelry can be a beautiful and luxurious addition to any wardrobe, but it is also a significant financial investment. Before making investment decisions, it’s always good to consult your financial advisor to weigh the risks and rewards.

Jewelry is often seen as a safe investment since it can be easily insured and stored. However, the value of jewelry can fluctuate widely, making it a riskier proposition than some other investments. If you do decide to invest in jewelry, do so with caution and insure your pieces against loss or damage. With careful planning and research, investing in jewelry can be a lifelong rewarding experience.

Examples of Pieces That Have Increased in Value Over Time

Some jewelry pieces never go out of style. Tiffany rings and Cartier necklaces, for example, continue to be highly coveted by fashionistas around the world. Similarly, Rolex watches are renowned for their timeless elegance and are often passed down from generation to generation. Even more traditional pieces like gold jewelry and diamonds have increased in value over time as supply has failed to keep up with demand.

For those with an eye for history, art deco pieces have become increasingly popular in recent years. Thanks to their unique design and craftsmanship, these items are now seen as collector's items, fetching high prices at auction. A gem-set, diamond-and-enamel tutti frutti bracelet by Cartier, for example, recently sold for $1.3 million at Sotheby’s, the highest price for any jewel sold in an online auction.

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Gem set tutti fruitti diamond bracelet by Cartier

Several jewelry pieces for women are considered classic and typically gain value over time, including diamond studs, tennis bracelets, earring hoops and statement rings. You can give them as gifts — or purchase them for yourself — showcasing your good taste while enjoying the value of a solid investment.

Whether it's Cartier, Tiffany or Rolex; gold or diamonds; art deco; or something else entirely, you can find plenty of examples of pieces that have become more valuable with time.

About the Author:

Dustin Lemick is the founder and CEO of BriteCo Jewelry Insurance and a third-generation jeweler with more than 13 years of retail jewelry experience.