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Jewelry is much more than just an accessory; pieces of jewelry highlight personalities and represent special moments in life.
But is it worth considering jewelry not only for its emotional value but also as an investment? In the following article, we will explore which pieces of jewelry have potential as investments and what aspects one should consider when wanting to invest in jewelry.
Often, when purchasing jewelry, the intention is to bring joy to someone else or oneself, so the emotional value is usually in the foreground. This could also be a shell found on the beach, for example. This is not suitable for material investment, just like the widely available costume jewelry. For an investment, rare pieces of jewelry are more appropriate, such as those made from particularly high-quality gold and set with particularly large and pure diamonds. Like our pieces made from recycled 18-carat gold.
But a special collection from a prestigious luxury jewelry brand or custom pieces from a famous designer can also achieve collector status and thus increase in value, just like antique jewelry from the past.
Many investors consider gold a possible component for diversifying wealth. The 2008 financial crisis, as well as the 2020 coronavirus pandemic, at times led to rising demand for gold. While stock prices collapsed, the price of gold not only remained stable but even reached new record highs! As far as its monetary value is concerned, it makes no difference whether it was recycled or newly mined. Beyond that, however, it should be noted that the price of gold has experienced very sharp fluctuations in the past.
An investment in gold therefore mainly helps preserve value in difficult times, but it should always remain only one part of a broader investment mix, as over the long term it is a speculative and risky form of investment.
Similar to gold, silver represents a relatively safe investment in turbulent times but is otherwise subject to high price fluctuations. The value trend is particularly influenced by the electronics industry, such as e-mobility, solar, or mobile phone manufacturing.
Due to the significantly lower material value compared to gold, investing in lightweight silver jewelry is hardly worthwhile, to be honest. Instead, silver bars or silver funds and ETFs would be more appropriate.
In principle, similar considerations apply when investing in platinum as with gold or silver. However, it is noteworthy that the largest share of platinum is mined in South Africa, and thus the platinum supply is heavily dependent on the conditions in South Africa. Additionally, it is a significant industrial metal and is primarily used in the catalysts of combustion engine cars. Since around 2011, the platinum price has been steadily falling, and before making an investment, it is important to carefully consider whether and when it might rise again.
Admittedly, investing in diamonds is a demanding matter that requires a great deal of expertise. A diamond’s value is determined not only by its weight, which is still relatively easy to establish, but also by its cut as well as its color and clarity. These factors are not always easy to assess, and even experts often disagree on the value of a diamond. While a diamond will always retain a certain material value, making a total loss on the investment very unlikely, it does not generate returns or interest like other capital investments do. In recent years, the value of diamonds has actually tended to decline, which is why some market participants focus on larger, certified diamonds in their investment considerations. However, value appreciation cannot be predicted. At this level, you are already looking at an investment in the lower five-figure range. In addition, the high storage costs should definitely be taken into account.
In summary, it can be said that due to the decline in value in recent years, investing in larger diamonds is probably the most worthwhile option, and expert advice is recommended when determining value.
When purchasing jewelry from a major brand, you are initially also paying for their brand name. For an investment, especially traditional luxury brands or iconic designers are recommended, as it can be assumed that their name will still shine for decades to come. Because a high-quality piece of jewelry is not a commodity; with a long holding period, you achieve value appreciation here. The best options for this are pieces from special collections or even exclusive custom-made items.
Once you have found a suitable piece of jewelry, it is a simple form of investment that requires little effort, unlike real estate, for example. The material value of precious metals can play a role in resale, but the actual achievable selling price depends on many factors. And of course, it is a beautiful investment that you can also wear yourself and enjoy.
However, a jewelry investment will likely only really pay off if you have the opportunity to invest in a particularly high-quality and rare piece of jewelry. Another drawback is the relatively high storage costs for insurance and safekeeping in a safe, while the jewelry itself generates no return or dividend. Finally, selling it on requires a great deal of patience. It can take months to find the right buyer who also recognizes the desired sale value in the piece.
Make sure that you can sell your piece of jewelry as a piece of jewelry and not just get the melt value of the precious metal and the material value of the gemstones from a dealer.
To help with this, be sure to pay attention to a jewelry certificate when purchasing or keep the receipt. These should document the fineness and weight of the precious metal as well as the color, clarity, and carat of the diamond. Now, the right buyer still needs to be found.
Whether jewelry is suitable as an investment depends on individual goals, budget, and risk tolerance. So it should not be purely a financial decision about an investment, but also an emotional one for a wonderful piece of jewelry that accompanies you for part of your life and may then be passed on again.
Our jewelry pieces are made from high-quality 18 karat gold, which is the finest gold that can be used for jewelry making. Pure gold is too soft for this purpose. The gold in our jewelry pieces is therefore a good investment, especially since the price of gold has steadily increased significantly in recent years. However, the gold, along with the elaborate German craftsmanship by hand, only accounts for a part of our price. Therefore, one should purchase our jewelry pieces more for emotional reasons, as they are not antique or collector's jewelry that can increase in value compared to the purchase price.
The chemical composition of lab-grown diamonds is identical to that of natural diamonds. However, due to the emergence of sometimes harmful monopolies in diamond mining in the past and the higher competition in the market for lab-grown stones, they usually cost less. A nice effect of this is that jewelry with lab-grown diamonds can be purchased at a lower price for the same quality.
Jewelry definitely loses value when worn; on the one hand, it shows signs of wear from being worn, and gold and silver pieces also lose a minimal amount of weight through wearing, which slightly reduces the material value. There are, of course, exceptions; antique pieces or rare custom-made items are often worth much more than when purchased, even if they have been worn.
Written By Helge Maren
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