What investments pay off in any crisis?
Gold and diamonds alone have no age
At all times, this metal remains a stable currency and a practical property that preserves capital and increases it under certain conditions. Therefore, investing in gold and gold jewelry is a smart option to save your finances in a crisis.
Experts believe that the demand for gold often increases during an unstable economic environment. Because jewelry is a reliable financial safety cushion.
- The cost of precious metals is constantly growing. So over the past year, prices have increased by 4%, and over ten years – by 142%. In the long term, it will increase.
- Gold is an investment for the future.
- Investment in jewelry is among the top 10 elite and most profitable assets of the Knight Frank Luxury Investment Index.
- Convenient to store and easy to transport due to its small size and weight.
Not every piece of jewelry can become a gold mine after a few years. For this, several conditions must be taken into account.
The first is the raw materials. Products with large natural stones from 1 carat for precious stones and from 5 carats for semi-precious stones. The price of gems grows much faster than the cost of precious metals.
The second condition is artistic performance. Jewelery or items with recognized cultural and historical values, sophisticated in the design of the jeweler and in the technique of creating.
The third condition is the name of the master, ownership history, uniqueness and production period. The more interesting the “life” of the jewelry, the more expensive it is at auctions. An unusual biography attracts various collectors, so finding a buyer for rare and unusual items is easier. You can find out about the past of jewelry in the archives with registration numbers and customer names. The data is stored in jewelry houses or in the hands of craftsmen.
You can also invest in precious stones. The most popular today are colored diamonds, sapphires, rubies and emeralds.
Reasons to invest in diamonds:
- A limited number of companies are involved in diamond mining in the world, which regulate the prices of stones
- The supply of natural diamonds, according to the experts of ALROSA, will decrease by 1–2% per year for the next ten years amid growing global demand for jewelry. The gap between supply and demand in the long run may create additional pressure and lead to higher prices for polished diamonds
- Investments in precious stones, like gold, have long-term prospects
- Diamonds are a capital-intensive asset
- No special registration of ownership
- An important advantage of investing in diamonds is independence from currency and country risks
For an investment, it is better to choose a large stone (from five carats) or a stone of a rare fancy color. When choosing, the origin and authenticity of the diamond plays a role. This is handled by certificates from respected institutions in the market – HRD (Hoge Raad voor Diamant), IGI (International Gemological Institute) and GIA (Gemological Institute of America). The ratio of 4C characteristics in a diamond, which we talked about earlier, is also important. Sometimes less valuable diamonds are purchased for a lot of money only because of the buyer’s desire to own a particular stone.
The cost of each individual diamond is determined individually due to the ambiguity and difficulty in evaluating it.
You can invest in the gem market through the purchase of shares of the largest diamond mining and processing companies, which grow in value along with the value of the main asset – diamonds. The most famous of them is located in Belgium in the city of Antwerp – Antwerp Diamond Bourse. Also known are large diamond centers in Israel (Israel Diamond Exchange), India (Bharat Diamond Bourse), UAE and some other countries.
You can also buy stones on online sites. Such services are provided by the first diamond investment exchange – the Singapore Diamond Investment Exchange (SDiX) and the largest leader in the sale of diamonds over the Internet – Rapnet.
The most exclusive diamonds are bought at major auction houses like Sotheby’s and Christie’s.
Gold or precious stones? What to invest in? Gold jewelry is more affordable and its prices rise more evenly than stones. Diamonds and other natural gems are rarer and more valuable in the market than gold. In both cases, the success of the investment depends on the choice of the product itself or the stone. The best option is a gold jewelry with a large diamond from a renowned jeweler and with an unusual history.