Jewelry is more than just an accessory that completes an outfit. For some, it can encapsulate a celebration of love. Others see it as a way to pass a legacy in the form of an heirloom. And there are those who have an eye for appraisal, which leads them to see the value beyond wearing and owning jewelry. And these are those who manage to learn the answer to the question “how to invest in jewelry?”.
However, the jewelry market, although a very rosy one is currently prone to volatility. Market conditions have somehow been stopping many people from investing in jewelry. But no worries, despite the uncertainty, there are ways for you to safely invest in the jewelry market. This means that you can earn a decent profit without investing top dollar.
How to Invest In The Volatile Jewelry Market
If you have ever wondered if getting into the volatile jewelry market is worth the time and investment, here are a few key things to remember.
Practical Tips: The Do’s and Don’ts
Whether you have just started getting into jewelry investments or you have been in the industry for a while, it pays to know some tips from jewelry investors. Investing in jewelry does not have to be such a profit-fueled endeavor–after all, who said you can’t have your bling and wear it, too?
Do: Know the value of fashion and costume jewelry
First, it’s important to remember that fashion jewelry may be as fleeting as the trend it is trying to emulate. Costume jewelry, especially those that are mass produced. With very few exceptions, fashion jewelry is probably the one type of investment wherein big brands are at a disadvantage. Instead, it might be better to look at emerging jewelry brands and independent designers. As a lot of their jewelry will be bespoke pieces, they can either excel in craftsmanship or the materials used.
Make sure you have a discerning eye for new designers. Be on the lookout for those who are incorporating talent with quality materials. What they may not have yet in brand name they may already offer more in terms of quality pieces.
Do: Invest in wearable jewelry
Some people assume that, like collectibles, jewelry should not be used if it’s for an investment. When it comes to collectibles, minted versions go for higher prices than those that have been taken out of the box. So naturally, some may think that jewelry with best resale value means jewelry that was never worn.
Others believe in the purity of metals for a bigger market. Thus, 24K gold seems like the only choice to invest in, However, note that resale value can sometimes also be based on wearability. Imagine getting a gold bullion or a 24K piece of gold. Unless it catches the eye of another collector, chances are it will be harder to resell on the account of it customers not being able to wear it.
Remember, some buyers are not thinking of the resell factor when they buy jewelry. They buy to wear jewelry, or they buy it as a gift. The purity of the gold may mean less than the actual design. Even jewelry that’s not made of gold can be a good investment.
Do: Understand antiques vs vintage pieces
The reason why some people wonder why jewelry is a bad investment is that they may not fully understand what each piece stands for. A lot of people throw around the terms “vintage” and “antique” when referring to jewelry.
Some vintage styles that are still hotly in demand include those from the Art Deco era, dating back between the 1920s and the 1930s. Most of these make use of precious stones, including diamonds and the vivid sapphires, emeralds, and rubies. On the other hand, antiques are those that surpass a century.
Be careful not to invest too much in some Victorian jewelry as appraisers advise that the embedded stones may have been replaced somewhere along the way. The best way on how to invest in gold is to find old pieces whose style will either be timeless or striking. Stick with jewelry from the early 20th century, whose designs are simple yet elegantly quirky to capture an audience’s attention.
Do: Watch out for good heirlooms
What makes heirlooms stand out and be one kind of jewelry that appreciates in value is their craftsmanship. As an investment piece, fine jewelry already has a good market value. Owners can either break them down and sell apiece or have them appraised for a holistic value of a single ring or necklace.
However, if you happen to have an heirloom piece from top designers, you may want to look at the design. All known jewelry designers have specific signature periods when they rolled out their best pieces. Their craftsmanship has a specific quality that makes even older pieces still worth a lot more in terms of value.
Add the fact that the design has not yet received a re-release, and you may be looking at one-of-a-kind pieces. A combination of good craftsmanship and scarce design may be the way towards appreciation of your jewelry.
Don’t: Forget retail margins
For those who are looking to get a quick buy, it’s crucial not to forget that retailer-bought jewelry loses its value. According to jewelry experts, retailers mark up by as high as 100%. So items that were bought for as much as $500 will lose value to only $250, with years wroth of recoup to get back the value that you paid for.
Don’t: Go for plated jewelry
There’s no argument: fine jewelry is the most expensive of all jewelry types. Hence, some semi-fine jewelry or even plated pieces are more preferred for everyday wear. That’s why most jewelry owners need to be very discerning about jewelry for wear and for investments.
A good question to ask is, “Does the gold plated chain lose its value in time?” Jewelry experts will attest to this. The most crucial thing about plated jewelry is that it is cheaper than fine pieces. While the gold used in plating is real, it can wear away because the goal is not really to make them long-lasting. Thicker layers of plating add to the price. There’s also such a thing as replating, though this can become expensive in the long run, especially if you want to subscribe to sturdier metals for plating.
Remember, plated jewelry is usually reserved for everyday wear. It is sturdy enough to be worn without occasion and affordable enough so you can wear it worry-free even during commute. This convenience is the trade-off in investment. Because when you invest in jewelry, it needs to be precious, long-lasting, and valuable.
Investing in Gold
Another key area in jewelry for investments is gold. Precious metals, especially gold, enjoy the position of being in consistent demand with technically a limited supply. Between ethical mining and the finite resources for gold, one can say yes to the question, “Is gold jewelry a good investment?”
There are many reasons why gold is still a hot investment, even when others think that the younger generation is no longer buying jewelry like before. Besides making traditional fine jewelry, there are many other uses that make gold a hard asset.
More than just the jewelry you wear
Gold is in demand not just in the jewelry industry, but also in manufacturing. Many electronic items incorporate gold into their make because this metal is a good conductor. It also does not corrode, which makes it a long-lasting addition. Due to its malleability, gold can also be molded into any shape and size–perfect for the continuously evolving state of technology today.
So the next time you ask, “Is purchasing gold jewelry a good way to make an investment?” remember that it is not just about the jewelry you wear, but the other uses that make it valuable.
Trade and sell anytime
Many investors consider gold as a safe haven. While it can still be affected by many factors, including the exchange rate, inflation, and politics, gold is generally safe from sudden and very unpredictable dips. Case in point is the recent economic changes brought about by the COVID-19 pandemic. This situation brought about an increase in demand for “safer” investments in the form of gold.
The demand includes both wearable gold, coins and bars, all of which saw an increase of up to 80% based on a year-on-year finding. This suggests that gold will have a higher bargaining power in terms of demand. And there’s the additional assurance that the price will not be too low despite any significant changes in the economy.
A preservation of wealth
One other way to see gold as an investment is that it preserves its price point. In fact, it can even be at a higher exchange rate, barring major changes. This makes it different from investing in monetary funds.
Also, when thinking of what gold is the best to buy, consider that it can be a hedge against the dollar and inflation. Gold preserves its wealth and value because of the complicated relationship of gold with the dollar. Add the idea of gold as a safe haven, because its value translates to how much it will be bought by the weight and not the currency exchange.
Finally, what makes gold an appealing investment addition is that it diversifies your portfolio. Any investor, whether interested in jewelry or blue chips, will do well to have a little investment in both for good measure.
Making Diamonds Appeal to Millennials
Between housing worries and career concerns, it seems as if millennials are no longer a viable market for jewelry. This assumption, however, proves false as a new study finds that women in the millennial generation still like and buy jewelry. According to jewelry experts, it’s all about knowing and understanding the unique wants of the market, and catering to that need.
More than the bling
In the past decades, jewelry may have been one of the trademarks of luxury. Nowadays, jewelry has become more than just a status symbol. For millennials, the answer to “how to invest in jewelry?” is not just about profits. It’s also about long-lasting sentiment.
Research suggests that millennials still buy jewelry but in different ways. Over half of the respondents of a recent survey showed that older millennial women buy jewelry for themselves. A good number either buy for their significant other or buy them together as an investment. Others still just buy fine jewelry to mark a milestone achievement in their lives.
Yet a notable practice is that as much as 91% of them research a brand before they make the purchase. This generation has grown with the awareness of the ethical practices of diamond mining and an understanding of secondhand jewelry’s value. Thus, they appreciate brands who share the same values. These brands should provide high-quality jewelry they can wear with no guilt.
A focus on diamonds
Diamonds may be a girl’s best friend, but they are in the running for millennials’ best friends, too. Among all of the precious stones in the market, millennials prefer diamonds, with the range of metal setting options distributed among white gold, silver, and gold.
To hit two birds with one stone, you may also need to provide a solution to the question, “What is the cheapest way to purchase gold?” If you are a millennial, one way to do this would be to have a strong collection of diamond rings that are set in gold. This gives you more selling power, in case you want to put your collection in the market for resale. Give them a good price for a quality diamond ring set in gold. This makes your collection a good investment portfolio.
The chart shows the volatility and the predictions for the global average per carat for diamonds (Source: Mining.com)
Strong, independents buyers
Contrary to the idea that they are spoiled brats, millennials are a discerning lot and deliberate when it comes to investing. Those who find their niche in jewelry see these as purchases they can and should make for themselves.
Experts see that over 50% of millennials buy jewelry as gifts to others or themselves. Yet they are very particular about the payment methods, to ensure that they are able to pay for it themselves. A good practice for jewelry sellers is to offer flexible price points and methods. This makes the brand more appealing and friendly to millennials, without needing to adjust actual price points for accommodation.
Final Thoughts: Investment in Things That Last
Some people wonder, does jewelry appreciate, especially if they want a safe haven for investments. For jewelry experts in Moneywise, it’s about investing not just in security but also in style. Because in the long run, jewelry is meant to be enjoyed.
With jewelry, it goes beyond the security of a renowned brand name. Think of it as building your own jewelry box while thinking of rainy days or potential heirlooms for future generations.
If you want to know more about how to invest in jewelry, check out our guide, “Investing in Jewelry: What You Need to Know” for more tips on getting started.
