Jewelry Investment Strategies: Crafting Profitable, Beautiful Jewelry

Investing in jewellery can be a daunting task, but it is a potentially lucrative one. Jewellery is made from precious materials such as gold, silver, and platinum, which are considered scarce resources with stable prices. These materials are valuable because of the skill, time, and energy required to obtain them. Jewellery made from these precious materials can increase in value over time, making it a good investment. When investing in jewellery, it is important to buy from reputable dealers to ensure the authenticity and quality of the pieces. It is also crucial to prioritise quality over quantity and look for pieces with intricate, well-designed styles. Additionally, investors should diversify their portfolio by investing in various types of jewellery, including vintage, antique, contemporary, and designer pieces.

Characteristics of Using Jewelry as an Investment when Making Jewelry

Buy from reputable dealers to ensure authenticity and quality

When investing in jewellery, it is important to buy from reputable dealers to ensure the authenticity and quality of your pieces.

Firstly, do your research. Ask for recommendations from friends and family, and read reviews. You want to ensure that the jeweller is established and credentialed, and will still be in business in a few years' time.

A good jeweller will have a great reputation, knowledgeable salespeople, and in-house experts such as gemologists and bench jewellers. They will also offer a wide selection of styles and price points, and be transparent about the provenance of their pieces.

When buying jewellery, always ask questions. Ask about the background of the piece, how its value is calculated, and whether it comes with the appropriate certifications and appraisals. A detailed consultation before purchase is a must.

If you are buying online, read customer reviews and examine product descriptions and images closely to ensure the jewellery meets your standards.

Finally, trust your instincts. If you have any red flags or feel pressured or rushed, it's time to find another jeweller.

Invest in precious metals such as gold, silver, and platinum

Gold, silver, and platinum are among the most common precious metals purchased by investors. They are valued for their aesthetic appeal and practical applications in industries such as jewellery, currency, consumer devices, and vehicles.

Gold is highly prized for its durability, malleability, and ability to conduct heat and electricity. Its value is determined by the market 24/7 and is largely driven by investor sentiment. Gold is also a good investment option for beginners due to its commonality and long-term value retention.

Silver is also a valuable precious metal, prized for its conductive, malleable, and antibacterial qualities. It is widely used in jewellery and industrial applications, such as batteries, appliances, solar panels, and medicine. Silver is a good option for investors new to precious metals due to its wide array of uses and lower price point compared to gold.

Platinum is rarer than gold and silver, which can drive up its price. It is highly demanded for automotive catalytic converters, jewellery, and medical products. Platinum is a good choice for investors looking for a crisis-proof investment due to its durability and value stability.

When investing in precious metals, you can choose to purchase physical bullion, such as coins, rounds, bars, and ingots, or invest in mining company stocks, mutual funds, exchange-traded funds (ETFs), or individual retirement accounts (IRAs). It is recommended that precious metals comprise a relatively low percentage of your overall investment strategy, with experts suggesting between 5% and 10%.

Diversify your portfolio with vintage, antique, contemporary, and designer pieces

Vintage, antique, contemporary, and designer pieces are all great ways to diversify your portfolio. Each type of piece has its own unique characteristics and benefits that can enhance your jewelry investment strategy.

Vintage Jewelry

Vintage jewelry is a broad term that refers to pieces from the past that are not necessarily classified as antiques. These pieces often have a unique style and charm that sets them apart from modern jewelry. Vintage jewelry can be more affordable than antique or designer pieces, and it can be a great way to find one-of-a-kind items that reflect your personal taste. The hunt for the perfect vintage piece can be exciting, and it allows you to connect with the history and craftsmanship of the past.

Antique Jewelry

Antique jewelry is typically defined as any piece of jewelry that is over 100 years old. These pieces are often considered works of art and can be highly valuable due to their rarity and historical significance. Antique jewelry is usually made with precious metals and gemstones, which adds to their investment potential. However, it is important to note that caring for antique jewelry can be daunting, as loose stones and delicate decorations require special care.

Contemporary Jewelry

Contemporary jewelry refers to the latest designs and trends in the jewelry industry. These pieces often reflect the current fashion and style preferences of the time. Investing in contemporary jewelry can be a way to stay up-to-date with the latest trends and appeal to a wider range of customers. Additionally, contemporary jewelry may be more affordable than vintage or antique pieces, allowing you to diversify your portfolio without breaking the bank.

Designer Jewelry

Designer jewelry is crafted by renowned jewelry designers or luxury fashion brands. These pieces often carry the prestige and reputation of the designer or brand, making them highly desirable and valuable. Designer jewelry is typically made with high-quality materials and craftsmanship, ensuring their longevity and potential for appreciation in value. However, it is important to note that not all designer jewelry appreciates in value, and it is crucial to research the specific designer and their reputation before investing.

By incorporating vintage, antique, contemporary, and designer pieces into your portfolio, you can diversify your investments, tap into different markets, and appeal to a wider range of customers. Each type of piece has its own unique characteristics and benefits, allowing you to create a well-rounded and robust jewelry investment strategy.

Consider the impact of rarity and demand on the value of your pieces

When creating jewellery with investment in mind, it is important to consider the impact of rarity and demand on the value of your pieces. The rarer a piece of jewellery is, the higher its value will be. This is because rare items are often sought after by collectors, and their value tends to increase over time. For example, natural saltwater pearls are considered a good investment option due to their rarity, as only 1 in 10,000 natural oysters yield a pearl suitable for jewellery.

Additionally, the demand for a piece of jewellery can also affect its value. Higher demand can drive up prices and make a piece of jewellery more valuable. For instance, diamonds are often in high demand and are therefore considered a good investment. The demand for a particular type of jewellery can be influenced by various factors, such as trends, historical significance, and the story behind the piece. For example, art deco jewellery from the 1920s and 1930s is highly sought-after due to its unique style and timeless appeal.

Furthermore, the combination of rarity and demand can significantly impact the value of your jewellery pieces. For instance, coloured diamonds are highly valued by collectors due to their rarity, and their popularity among investors drives up their demand and, consequently, their price. Therefore, when investing in jewellery, it is essential to consider both the rarity and the demand for the pieces you are creating or purchasing.

Moreover, the value of gemstones can be influenced by their characteristics, such as colour, clarity, cut, and carat weight. For example, a "pigeon's blood" Burmese ruby, known for its pure red colour, is highly prized and can command high prices at auctions. Similarly, the origin of gemstones can also impact their value, as certain regions may have unique characteristics or historical significance that enhance their appeal.

Lastly, it is worth noting that the value of jewellery can fluctuate over time due to various factors, including economic conditions, consumer demand, and market dynamics. Therefore, when investing in jewellery, it is advisable to consult experts and conduct thorough research to make informed decisions.

Protect your investment with insurance

Protecting your investment with insurance is a crucial step in safeguarding your jewelry. Here are some essential tips to ensure your valuable pieces are adequately protected:

• Choose the Right Insurance Policy: Opt for specialized jewelry insurance policies that offer comprehensive coverage. These policies typically cover various risks, such as loss, theft, and damage. Alternatively, you can add a jewelry rider to your existing homeowners or renters insurance policy, but this option may have more limitations.
• Get Quoted with Necessary Documentation: Provide detailed information about your jewelry items when requesting a quote. This includes submitting purchase receipts and clear photographs of each piece. Ensure that all the information provided is accurate and up-to-date to avoid issues during the claims process.
• Pay the Premium: Keep your insurance policy active by paying the annual or monthly premium regularly. Remember to review and renew your policy periodically to maintain continuous coverage for your jewelry.
• Know What's Covered: Understand the specific terms of your chosen policy or rider. Jewelry insurance typically covers theft, loss, and disappearance. Some policies, like Lavalier, also include damage in their "all-risk" coverage.
• Insure Multiple Pieces: If you have a collection of valuable jewelry, find out if each piece needs to be scheduled separately or if you can obtain blanket coverage for your entire collection. This is important to ensure all your items are adequately protected.
• Consider Standalone Jewelry Insurance: Insuring your jewelry through a standalone policy gives you access to specialized jewelry insurers. Additionally, making a claim on a separate policy won't affect your overall property insurance premium.
• Compare Options: Before deciding, be sure to quote both standalone jewelry insurance and adding a rider to your property insurance. Compare the coverages, rates, and terms offered by different insurers to find the best option for your needs.
• Understand the Cost: Jewelry insurance typically costs 1-2% of the jewelry's value. For example, insuring a $5,000 piece of jewelry may cost around $50-$100 annually. The cost will depend on the value of your jewelry and the insurer's rates.
• Ask About Deductibles: When making a claim, you may have to pay an insurance deductible. However, there is usually no deductible if you have scheduled your jewelry on your property insurance or have a separate jewelry insurance policy.
• Review Coverage Limits: Jewelry insurance may have limits on the total amount you can insure. Ask about these limits before purchasing insurance, especially if you have multiple high-value items.
• Understand Exclusions: Jewelry insurance typically does not cover pre-existing damage to your jewelry. Additionally, watch out for specific exclusions in the policy, as certain losses may not be covered.

By following these steps and choosing the right insurance option for your needs, you can rest assured that your jewelry investment is protected.

Frequently asked questions