You may have assumptions that top-dollar jewelry as well as gems are awesome investments. But that is not always the case. Gems that have lesser value usually appreciate more and at the same time, easier to liquidate. Many of the well-informed investors are actually choosing gems that are low to moderately priced. This is regardless of whether they have to to get funding for buying the gems.
Again, some investors have skill in buying and selling high-end, unusual or rare segments of precious gems and stones in the market. With all these thing said, you may be wondering that there is big profits waiting for you in this market. But the real question is, how are you going to make returns upon your investments?
The Rules of Gem Investing
However, just before we dive into the rules, it is important that you keep yourself mindful of the term investment grade. You may come across this a number of times in the industry but this has no clear meaning when it comes to gemstones. Likewise with the terms semi-precious and precious stones, it is so broad and has lots of exceptions. To give you an example, gems with excellent grades in all 4Cs might be beautiful and have higher price tag but, you might never be able to recover your costs in the event you tried to resell it.
Nevertheless, these gems are occasionally called as investment grade. As a matter of fact, the Federal Trade Commission or FTC of the United States frowns on the utilization of such term. Despite the fact that it isn’t illegal to use it for advertising, it has been heavily abused by fraudsters that numerous consumers are cringing when they hear it.
But if you are really serious and decided to make money in gemstones, here are things to be remembered:
Have Control on Your Cost Basis
It is totally possible to generate money when you invest in gems. But, your cost basis in a particular gem needs to let you have enough room to build profits the day you acquired the stone. You need to have margin of safety. Paying the right price would be the single biggest determining factor whether you can generate handsome ROI or not.
Expand Your Network
Basically, you are going to need buyers who have the ability of selling your gems at a retail price. This way, they can somehow pay you in wholesale prices for the gems you have invested in. Likely buyers will include online auctions, auction houses and jewelry stores.
