Therapeutic properties

What is the best gemstone to invest in?

Throughout human history, precious stones and jewelry have always been considered not only as a store of value, but also as a tool for increasing capital. This topic was dedicated conference organized in Moscow on April 28 by the Gemological Center of Moscow State University, which brought together a large number of experts from the fields of gemology, jewelry, investments and the banking industry. Each of the speakers identified the main trends in the field of investing in precious stones. According to Executive Director of the GemCenter of Moscow State University Yuri Shelementyev, rough diamonds may be of interest as an investment object. Diamonds In recent years, prices have been rising faster than diamonds. Therefore, the purchase and subsequent “aging” of stones in a safe can be considered an investment. Experts today do not recommend investing in colorless diamonds. Due to the fact that there is a Rapaport price list, dealers always have exact prices, so diamonds are a highly liquid product, but at the same time low-margin. Today they play a more important role fancy colored diamonds, as well as many categories of colored stones. The expert especially noted corundums, namely rubies and sapphires, prices for which are growing rapidly, including stones refined by heating. Other types of improvement are not attractive for investment. For example, the cost of a 20-carat heated sapphire can be $15 per carat, noted Yuri Shelementyev. At the same time, there is a category of people for whom refined sapphires will not look interesting due to the fact of their improvement. On untreated sapphire the price tag sometimes reaches from $125 to $000 per carat. When purchasing, you should pay attention to Burmese rubies and sapphires from Kashmir, which are rightfully considered the best. However, it cannot be said that absolutely all sapphires and rubies are of interest to investors. There are such stones that it is not profitable even for miners to lift the earth. Yuri Shelementyev paid special attention to untreated rubies from the Montepiez deposit in Mozambique, which are currently undervalued by the market, however, in two or three years their deposit will be exhausted and prices will go up. Also interesting for increasing capital spinel. For her, the country of origin is not extremely important; often it cannot be determined at all. This stone is practically not refined, and a certain color is also not important. Some people buy orange spinel, others lavender, and the cost per carat can reach $15. Red Burmese and blue cobalt spinels are the most expensive. Over the past 000 years, their prices have increased several times. Yuri Shelementyev told about jadeite, for which price tags increase significantly over time. In China, when talking about its value, dealers make a sharp upward gesture to describe its incredible and rapid rise. Investing in fancy colored diamonds Tatyana Olifirova, founder of Rare color diamond advisors, member of the board of directors of PO Kristall spoke about the investment attractiveness of colored diamonds. According to her, their high cost is influenced by two main factors, exceptional rarity (of the diamonds mined, only 0,001% can be classified as fancy flowers, according to the Gemological Institute of America), and the reduction of mining sites. Argyll – a deposit that supplies the market with about 90% pink diamonds, according to experts, will close in 2020. Fancy colored stones have the lowest volatility, so they have more stable prices. At the same time, they do not have a Rapaport price list like colorless diamonds, which gives investors scope for possible earnings. The quality of the color of fancy diamonds greatly influences their price tag, category stones Fancy Intense, Fancy Vivid – the most attractive for investment. Tatyana Olifirova noted that since 2000, prices for colored diamonds have increased by 280%, for blue diamonds with a rich color (Fancy Vivid Blue) – by 360%; for comparison, the speaker cited the example of housing in London, which increased by 175 over this period %. Investments in pearls Reviewed trends in the global pearl market and investments in it Ksenia Podnebesnaya, founder of the jewelry brand “House of Pearls of Ksenia Podnebesnaya”. For ideal quality golden South Sea pearls in three years the price increased by more than 100%, and for Tahiti pearls, the white group of the southern seas – by 15-20%. Nature is not capable of creating pearls in huge quantities, which is why the cost of pearls is steadily increasing. Pearls are an indicator of the state of the planet. In order to grow an ideal pearl – Hanadama (from Japanese – pearls like an ideal flower), it is necessary for a large number of factors to coincide: clean water, a certain temperature, a sufficient amount of oxygen, etc. The expert especially noted the change in demand for different types of pearls: If earlier they bought more Akoya pearls, now the leader in sales is South Sea pearls, and only then Akoya pearls and black Tahitian pearls.

Tatyana Olifirova, founder of Rare color diamond advisors, proves the attractiveness of investing in colored diamonds Ksenia Podnebesnaya, founder of the jewelry brand “House of Pearls of Ksenia Podnebesnaya,” talks about trends in the growth of pearl prices

Criteria for identifying profitable stones Mikhail PshenichnyThe company Gemlovers, noted the following important criteria for determining which stones to invest in. First of all, these should be large stones – every year there are fewer and fewer of them, rare, but not little-known. Investment attractiveness increases if large jewelry houses use this stone in their jewelry. In his opinion, will be good for investment rubies from 5 carats, tourmalines from 10 carats. If the stone is too large, then it will not be in great demand on the market, since it can no longer be used in jewelry. In addition, the demand for certain stones may be local in nature: what is popular in one region may be of little interest in another. It is necessary to take into account that there is a favorable purchase price. For example, there is no point in buying stones from a large jewelry brand. Mikhail Pshenichny highlighted particularly interesting objects for investment: namely pink and red spinels from Burma, Pakistan and Tanzania, especially the higher color categories. In addition, tourmalines showed good growth, first of all paraiba tourmalineand alexandrites.

Mikhail Pshenichny noted Paraiba tourmaline as a particularly interesting object for investment

Risks when investing Founder of the Sundaygem group of companies, Sergey Ivanov discussed the benefits and major risks of investing in exclusive and rare colored gemstones, raw gemstones, and investing in mass-sized colored gemstones. Exclusive and rare stones are a profitable investment in the long term. Working with raw gemstones is associated with high risks during the process of refining the stones, after which the cost may not only not increase, but may even decrease significantly. Also, with the current level of technology, purchasing stones both in raw and processed form is associated with a high risk of purchasing synthetics. The result of Sergey’s report was the conclusion that the most reliable type of investment in precious stones is investing in colored gemstones in mass sizes, used in the production of serial jewelry. Complexities of the loan process I discussed the difficulties of dialogue between jewelry industry enterprises and financial institutions within the framework of the lending process. Vladislav Dokuchaev, Associate Professor of the Department of “Investment and Innovation” of the Financial University under the Government of the Russian Federation, Ph.D., SER. Those who know the banking business know that there are no loan officers on the market who understand jewelry and precious stones, so such collateral is rarely profitable. In addition, there is a problem on the part of the jewelry business, which does not know the “credit” language, which creates difficulties in communication between bank employees and business representatives. Practice of multiplying funds Shared practical aspects of assessing the investment attractiveness of precious stones and jewelry Alexey Smirnov, head of the private expert organization “Center for Expertise and Assessment”. The expert gave an example of a possible investment with a budget of $100. For this money you can purchase 000 diamonds weighing 425 carats or 0,20 diamonds weighing 15 carats with average quality characteristics H/VS1,00. Small diamonds, when inserted into simple jewelry, can be sold faster, but those 2 large stones can lie for a long time without finding their buyer. At the same time, the markup on small stones is much higher than on large ones. For entrepreneurs, working with smaller stones will be much more interesting. Alexey Smirnov paid special attention to the choice of diamond characteristics, for example, during the crisis, D/IF stones (with the highest color and clarity) were sold at huge discounts: 50-60%, and diamonds with average characteristics were sold at a 20-30% discount , therefore the latter will be the most attractive for investment.

Vladislav Dokuchaev talks about the difficulties in communication between bank employees and business representatives Sergey Ivanov, founder of the Sundaygem group of companies, talks about the benefits and risks of investing in exclusive and rare gems

The role of independent gemological examination In conclusion Alexander Stolyarevich, head of the examination department of the Gemological Center of Moscow State University emphasized that independent gemological examination is an important tool for reducing risks when investing in precious stones. It is reckless to invest money without knowing what kind of stone it is, since cheaper imitations are often passed off as expensive diamonds. Moreover, at the moment, synthetic diamonds have begun to appear frequently on the market. Conventional instruments and methods do not work in this case; you need to use a deep technique to determine synthetics. It is especially difficult to conduct research when the stones are already in the product. Synthetic rubies, sapphires, and emeralds are common on the market, so an expert assessment is needed to determine the nature of the stone. An independent examination of the stone is carried out in the laboratory, which minimizes the subjectivity of the assessment. Upon acceptance of the product, it is assigned a number with which the object falls into the hands of experts. Information about the customer is recorded separately. The stone is examined not by one, but by three experts in order to determine its characteristics as objectively as possible. Alexander Stolyarevich especially noted that assessments using a magnifying glass, microscope, and tester are no longer enough today. Diagnostic issues must be approached with knowledge of a certain repeatedly proven technique. Basic rules of financial security require diversifying your portfolio, that is, using different forms of investment. For Russians, the range of investment options in the stock market and foreign assets is rapidly shrinking. In search of new opportunities for long-term preservation and increase of capital, it is worth paying attention to such non-obvious proposals as investing in diamonds and other precious stones. 45 500 000 ₽
Jewelry weight: 12.43 g. On request
Jewelry weight: 70.86 g. 11 780 000 ₽
Jewelry weight: 18.43 g. 37 800 000 ₽
Jewelry weight: 6.84 g. 43 290 000 ₽
Jewelry weight: 6.69 g. 18 600 000 ₽
Jewelry weight: 4.33 g. 14 750 000 ₽
Jewelry weight: 12.42 g. The potential of this segment as an investment vehicle is driven by the growing demand for precious stones around the world. This is largely due to the high rate of extraction and rapid depletion of non-renewable natural resources. According to expert estimates, the explored deposits will last for 30 years, and large new deposits have not been discovered in recent years. Let’s take a closer look at how to invest in diamonds and who is suitable for this type of investment. Let’s talk about the nuances, difficulties and unobvious pitfalls.

Foreign and Russian market of precious stones

Europe and the US have a long history of investing in precious stones and already established markets. There, the liquidity of such assets is higher, and the entry threshold is lower. In Russia, interest in this area is just beginning to form. Now the initial stage of asset accumulation is underway, and the secondary market, one might say, does not exist. In our country, only organizations and individual entrepreneurs registered with the Assay Office can sell precious stones.

Which stones are suitable for investment?

For several centuries, diamonds have been a reliable and most predictable alternative for saving money, not susceptible to crisis situations. Statistics from the Rapaport agency show that since March 2022, prices for diamonds of different weights and qualities have increased by an average of 7-13%. However, not all diamonds have investment characteristics. Buying diamonds and jewelry for wear and for investment is not the same thing. If your goal is to make a profit in the future, it is worth purchasing investment stones. This category includes items that have limited availability and volume on the global market. The quality characteristics, uniqueness and rarity of the stone play a key role in creating investment value. Diamonds are divided into colorless and colored. They are graded by color, clarity, weight and quality of cut. Fancy Color diamonds are often rarer, which affects their value. For comparison: a 1-carat colorless diamond costs about $15, a blue diamond costs $000, and a pink diamond of the same weight costs $150 million. There are only a few green and red diamonds in the world, so their price has no maximum limit. In addition to diamonds, colored gemstones are among the assets with high investment potential. They demonstrate a high growth index as opposed to diamonds, which is explained by their scarcity and demand. For example, if diamonds grow in price quite predictably, then rubies with investment characteristics over the past 5 years have exceeded their value by 100-150%. Indirectly, auction data speaks about their demand and investment attractiveness. In 2015, the 25-carat Sunrise Ruby sold for $59 million, becoming the most expensive ruby ​​in the world, and set a record price for one carat of $30 million. The ranking of the most promising investments in colored gemstones is published annually by The Natural Gem Stone website. The top list for 2022 includes traditional ruby, emerald and blue sapphire, as well as Paraiba tourmaline, alexandrite, and spinel. Although this rating (like any other) cannot be perceived as the only correct one, it objectively reflects existing trends.

Factors influencing the price of gemstones

  • weight at least 3 carats;
  • purity class from IF to VS2 (from perfectly transparent to containing minor inclusions invisible to the naked eye);
  • color from D to G (D (completely colorless), E (colorless), F (virtually colorless);
  • very good or excellent cut. The highest quality rating – Triple Excellent – is assigned to a diamond when all three components of the cut (shape and proportions, symmetry, polish) are rated at the highest level. In this case, the diamond is considered to be perfectly cut.

You should also pay attention to the special marks on the certificate. The note “hearts and arrows” deserves attention – this is the name given to the effect inherent in “circle” cut stones. Samples of the standard cut are characterized by the ideal symmetry of this design.

For colored stones, the value criteria have some differences: color saturation, degree of transparency, absence of signs of refining, deposit – play an important role in determining the value. Weight also affects the price. For example, the most in demand on the world market are rubies weighing from 5 carats, and tourmalines – from 10 carats.

Benefits of investing in gemstones

According to ALROSA, from 2005 to 2020, the profitability of diamonds of various types amounted to 45-362%. Stable growth in value makes precious stones an attractive investment instrument that helps preserve and increase capital in the medium and long term.

For the experienced investor, gemstones represent significant capital compressed to a minimum physical size. A 3-carat diamond (about 1 cm in diameter) can cost tens or hundreds of thousands of dollars. Prices for stones are pegged to world prices, making this asset an effective substitute for foreign currency, especially during periods of economic and geopolitical turmoil.

There are no registers of diamond owners anywhere in the world. This means that, unlike accounts, securities or real estate, precious stones cannot be “frozen” solely on the basis of the owner’s citizenship.

A separate category of investors consists of collectors and connoisseurs who receive aesthetic pleasure and a whole range of positive emotions from owning precious stones. For them, diamonds are both a collectible, on the one hand, and an investment, on the other.

Risks and limitations

It is absolutely true that gemstones are considered a profitable investment. However, it is a mistake to believe that investing here is similar to working with securities and shares, when you need to buy an exchange-traded asset and monitor price fluctuations. Everything is much more complicated. In most cases, these are long-term and expensive investments.

Typically, growth becomes noticeable after at least 5 years, most often after 10-15 years. And this is the case if the purchased stone is a truly unique specimen.

Unlike gold bars, which are hallmarked, each diamond must be valued individually. It is not always possible to distinguish an “ordinary” diamond from an investment diamond with a high potential for growth in value. For evaluation, contact the leading gemological laboratories in the world.

As with other high-value assets, care must be taken to safely store investment stones. The owner can equip his own storage facility and admire his treasures at any time, or rent a safe deposit box in a bank.

How to start investing in gemstones

One of the significant risk factors when investing in jewelry is the high probability of purchasing a fake. For this reason, you need to buy stones only at specialized sites. Each stone must have a corresponding certificate of authenticity. The certificates of GIA (Gemological Institute of America), HRD (Higher Diamond Council), IGI (International Gemological Institute) are recognized on the international market. Documents from Russian gemological laboratories are quoted less abroad than those listed earlier.

Investing in precious stones can be compared to classic fundamental analysis. It is necessary to study not only the product you are planning to purchase, but also the activities of the manufacturing company. The choice of investment strategy depends on the investment goals. Experts recommend that novice investors buy only those stones that can be easily sold. These are specimens with high characteristics of purity and transparency weighing 0,7-0,9 carats – as a rule, they are in good demand among jewelers. A stone with unique characteristics weighing more than 10 carats can be sold on the professional market. It will take longer to find a buyer, but the rise in prices for exclusive stones is always higher than the market average. Investors who set themselves the task of entering assets in the medium term must take into account the liquidity of the investment item and the entry threshold. For investments in colored gemstones such as ruby, sapphire, emerald, the lower entry limit is $50 per position.

Conclusion

Diamonds are among the top 10 most popular alternative investments. You should not expect quick speculative profits from investing in precious stones. But diamonds, as well as colored gemstones, have been and remain a reliable way to save money during times of uncertainty.

Investing in precious stones is a painstaking process that requires special professional knowledge and understanding of the intricacies of the market. The most difficult thing for investors is to exit an asset profitably, that is, to find a buyer willing to pay the right price. In the short term, this type of investment will remain a niche option for wealthy people who see in precious stones not only the opportunity to make a profit, but also the pleasure of owning rare luxury items.

We recommend reading:

  • Paraiba tourmaline: history, deposits, features
  • Rare and expensive Pigeon’s blood rubies
  • Jewelry transformers
  • Top 10 jewelry with emeralds from the jewelry house CHAMOVSKIKH

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button