Jewellery, and in particular gold, as a valuable asset, has always been a popular option for investors.
According to Statista: “Worldwide gold demand amounted to 4,740.8 metric tons in 2022, an increase from 4,012.8 metric tons in the previous year.”
In the UK, over the past year, there has been a +191% increase in searches for ‘affordable vintage jewellery uk’ and a +23% increase in searches for ‘second hand jewellery auction uk’.
In recent years, investing in vintage jewellery has been on the rise as consumers look for rare pieces to differentiate themselves. But challenges remain when it comes to investing in jewellery – particularly rare and precious stones and antique jewellery.
Diamonds Factory Ireland’s Diamond Specialist, Talia Smith, has listed the red flags to be wary of if you’re looking to invest in a piece of sparkle or simply looking to gift a loved one a unique piece of quality jewellery this Christmas.
Below, Talia has answered the following questions:
1. What are the red flags when buying an investment piece of jewellery?
Things to look out for are the place you buy your investment piece from, if the seller cannot provide proper documentation, such as certificates (from a highly regarded laboratory) from reputable gemological laboratories or provenance for antique pieces, it’s a red flag. Proper documentation verifies the authenticity and quality of the jewellery. If the report number is verified on both the diamond’s girdle and the certificate, it’s very likely to be a real diamond.
Be wary though, as some diamond grading labs are more reputable and have stricter grading standards than others.
If the price of the jewellery seems too good to be true or significantly lower than market value, it could indicate that the piece is not genuine or that the seller is trying to offload an inferior item. Be wary of sellers who employ high-pressure sales tactics or try to rush you into making a decision. Take your time to research and make an informed choice.
2. Is jewellery a worthwhile investment?
While the market for jewellery can experience fluctuations, well-crafted and high-quality pieces often appreciate in value or at least hold their value during economic uncertainties but will be an asset that you can physically hold and enjoy. Unlike stocks or bonds, which exist as digital entries, jewellery is a physical item that you can wear and admire, adding both aesthetic and emotional value.
3. When would jewellery not be considered a worthwhile investment?
Investing in jewellery requires knowledge of the market, materials, craftsmanship, and authenticity. Lack of expertise can lead to overpaying for a piece or investing in something of questionable value. The jewellery market can be subject to fluctuations due to changing trends, economic conditions, and shifts in consumer preferences. Not all pieces of jewellery will necessarily appreciate in value due to how it’s crafted or where it’s been crafted – this will depreciate the value for investment.
4. What elements make for a high-quality investment piece?
Fine craftsmanship adds value to jewellery. Quality jewellery shows meticulous attention to small details such as setting, prong work, and finishing.
Jewellery made from high-purity precious metals and precious gemstones and jewellery created by renowned designers or prestigious brands can command higher prices due to their reputation for quality and innovation. Certification and documentation from authorised gemologists – these documents confirm the authenticity, quality, and characteristics of the materials used.
5. What value does a collector’s status bring to a particular piece of jewellery?
When a piece achieves collector’s status, it becomes more than just a piece of adornment; it transforms into a valuable work of art, history, and cultural significance.
6. Are fine-coloured gemstones a good investment? What about particularly rare gemstones, such as the Padparadscha sapphire, alexandrite, Paraiba tourmaline, cobalt spinel or natural-coloured diamonds?
Investing in fine-coloured gemstones, particularly rare ones like Padparadscha sapphires, alexandrites, Paraiba tourmalines, cobalt spinels and natural-coloured diamonds, can offer the potential for both financial gain and aesthetic enjoyment depending on the quality of the stones. However, it’s crucial to approach such investments with caution and thorough research. If you’re considering investing in rare gemstones, it’s advisable to work with experts in the field and carefully evaluate your investment goals, risk tolerance, and the specific characteristics of the stones you’re considering. As these stones are rarer than traditional gemstones, they can have a higher potential for appreciation in value over time.
7. Is it a good investment field in antique jewellery?
Antique and vintage jewellery can be valuable due to their historical significance, craftsmanship and scarcity. The condition of antique jewellery is crucial to its value. Pieces in good condition, or those that have been properly restored without compromising authenticity, tend to command higher prices. If you’re considering investing in antique jewellery, begin by educating yourself about different historical periods, styles, and materials. Familiarize yourself with reputable sources, auction houses and appraisers who specialize in antique jewellery.
8. How should you keep your jewellery to extend its lifetime?
Proper care and storage are essential to extend the lifetime of your jewellery, whether it’s precious metals, gemstones, or antique pieces. Clean your jewellery before storing it. Sweat, oils, and dirt can accumulate on the surface, potentially leading to tarnish or damage over time. Moisture can cause metals to tarnish and gemstones to become dull. Store your jewellery in a dry place, and avoid exposing it to water, humidity, and extreme temperature changes. Perfumes, lotions, and household chemicals can damage metals and gemstones.
9. Is it worth getting jewellery insured and how long for?
Jewellery insurance provides financial protection in case your jewellery is lost, stolen, damaged, or misplaced. Ultimately, the decision to get jewellery insurance and the duration of coverage depends on your individual circumstances, the value of your jewellery, and your level of comfort with the associated risks.
10. How do you know when the best time to sell your investment jewellery is?
The best time to sell your investment jewellery depends on a combination of market trends, personal goals, financial needs, and the specific characteristics of your jewellery pieces. Keep in mind that predicting the market’s movements perfectly is challenging, so consider a long-term perspective and make decisions aligned with your overall financial strategy. Prices can fluctuate based on supply and demand, economic conditions and changing consumer preferences.
