Investing in Gemstones: Everything You Need to Know
Investing in gemstones is not just for the rich and the royal
It may seem like gemstones are only something for those with deep pockets, but the truth is that anyone can invest in gemstones. With time, patience, and knowledge, your investment gems can change your financial situation for the better.
Should you do it?
Gems have always and will always be a desired commodity. Even when the economy is in shambles, the price of gems continues to rise. And there are always people willing to purchase them. If you have the money to invest, gemstones just might be a good move for you.
Things to know before investing in gemstones
- The key to investing is buying and selling at the right time. This means that you want to purchase your gems when they are priced low and then sell them when the price increases. Sometimes, you will need to hold onto the gems for a while to get the best profit.
- It is also possible to see a drop in value for a short time, but you can rest assured that gemstones are always valued and coveted, so the price will increase again.
- If you run across a great deal for many tiny gems, you may want to pass it up. Small gems have nowhere near the worth of one large stone.
- It is best that you either spend a great deal of time learning about gems or to have a gemologist check out the gemstones you want to purchase. This is because the colors can get confusing. A green stone is not always an emerald nor is a red one always a ruby. If you do not know how to tell the difference, you may lose your investment or make far less of a profit than you thought.
How to get started investing in gemstones
Depending on how involved you want to be, there are two separate ways you can invest in gemstones.
The hands-on approach
Some people like to do things themselves. In the case of gemstones, this would mean the investor actually buys and holds the hard asset — the physical gem — and sells it later at a profit. The upside to it is that you have more control over how much profit you make and what exact gems you deal in. The downside is that having a hard asset adds extra work and costs, including insurance.
The hands-off approach
There is always the option to treat investing in gemstones as you do with many other investments — through a proxy. You can easily invest in mining stocks, share in the profit, and never have to touch a gem yourself. This is a great option for people who do not really have the time to invest in handling the buying and selling or simply have no inclination to do so. You can even diversify much easier this way, investing in different gems as well as gold and silver.
Which gemstones make good investments?
While gemstones as a whole are valuable, some are definitely more sought-after than others. The following 10 make some of the greatest investment gemstones to look into:
Gems have always and will always be a desired commodity. Even when the economy is in shambles, the price of gems continues to rise. And there are always people willing to purchase them.
Tsavorite garnet is a green gem from East Africa that has higher refraction than the emerald, making it more desirable to many. It comes in colors from a deep green to mint green, and it is always untreated. Its rarity alone makes it a good investment.
Alexandrite is from Russia, Brazil, and Tanzania. This gem has an amazing ability to change colors, which makes it both beautiful and unique.
This green gem is both beautiful and elegant. Untreated emeralds from Colombia, Brazil, and Zambia are all good investments.
If you like the idea of selling beautiful, vivid gems Spessartite Garnets are a good one to consider. The Mandarin Garnet is one of the finest examples, and it is an incredible pure orange that makes them very rare. They most often come from Nigeria and Namibia.
From the Brazilian state of Minas Gerais comes the rarest form of topaz gems. They are referred to as imperial topaz and they come in a variety of colors from a pinkish-red color to pink and violet, and even orange to golden-orange. All of these untouched by heat are valuable, but those with pink and red in them are currently the most valuable. If you can locate a pure red natural topaz, you have found the most valuable of all.
It may seem like gemstones are only something for those with deep pockets, but the truth is that anyone can invest in gemstones. With time, patience and knowledge, your investment gems can change your financial situation for the better.
Spinels may not be mentioned often, at least compared to other gems, so you might be surprised to learn that many famous rubies are actually spinels. This even includes some of the British Crown Jewels.
If you would like to invest in spinels, look for those that are deep orange, red, and hot pink. At this time, the best investment spinels are the red Burmese spinel and those considered neon pink-red spines from Tanzania.
Paraiba tourmaline was originally discovered in Paraiba, Brazil in 1989, but is now also found in Mozambique and Nigeria. Its neon glow makes it both brilliant and elegant. The Brazilian form most often makes the best investment gems.
Tanzanite was originally found in Tanzania in 1967. It is formed from zoisite and is a brilliant and rare color– somewhere between blue, violet, and purple. As its only source is still Tanzania, it is considered to be ever rarer than diamonds.
The blue sapphire is commonly considered the second most popular colored gemstone to invest in. Though blue may be the top colored sapphire, other colored sapphires, such as yellow and pink, are growing in popularity. Investing in any of them should bring good future returns. They were once found in Kashmir, but are now brought more from Burma, Madagascar, and Ceylon.
Rubies are viewed as the number one investment gem, mostly due to its rarity. Fine unheated rubies from Tanzania, Mozambique, Burma, and Madagascar are all known for bringing in good profits.
There are, of course, other gemstones to consider, but these ten are a good place to start your search.
Where do I purchase gemstones?
Let’s start by saying that your biggest profit will come through wholesale purchases, not retail. That may seem obvious, but there have been many who have fallen prey to purchasing retail when they first begin investing in gemstones.
While there are many gemstone dealers out there, you must be careful where you buy. Two dealers to look into are AJS Gems and Gem Rock Auctions.
Before dealing with anyone, always check for any business ratings you can find. And, again, using a certified gemologist to check the gems before a purchase is one of the best ways to protect yourself from fraud and scams.
Storing your gems
You have made the monetary investment into your gems. The last thing you want to do is decrease their value due to improper storage. The best way to store them is to put each gem into an individual compartment, preferably in a box with a soft-liner. If the box does not come with a soft lining, you can always get the materials to line it yourself. It is important to remember that some stones are harder than others. When they are all stored together, the harder ones can scratch the softer ones, damaging your investment.
Hire a gemologist- This can not be stressed enough. Your initial gemstone purchase can make or break your investment. You want to be sure that you are getting valuable gems at a good price. A gemologist can make this happen.
They should also be cleaned regularly. You can do this at home by soaking them– individually– in warm water with dish soap. You then gently scrub them with a very soft brush and pat them dry.
How to get the most out of your investments
Nothing is ever certain, but there are some steps you can take to maximize your gemstone investments.
- Hire a gemologist- This can not be stressed enough. Your initial gemstone purchase can make or break your investment. You want to be sure that you are getting valuable gems at a good price. A gemologist can make this happen.
- Learn everything you can- The better educated you are, the better choices you are likely to make.
- Be patient- Getting the best return on your investment may take some time — years, even. Try to hold onto them as long as you can.
- Sell through the right channels- Auction houses are often great places to sell your gemstones. Buyers there are normally serious about purchases, and it is rare to deal with negotiations.
A deeper dive- Related reading from the 101:
Investing isn’t as hard as you think.
It also doesn’t have to cost you a fortune.