While there is money to be made in gem investing, it is not a recommended pursuit for those who don’t have experience in the industry. One reason it’s challenging for beginners to succeed with gems is because of how difficult it is to determine quality and value. While the term “investment grade” is freely used, it is extremely ambiguous and doesn’t reflect any set degree of quality. Likewise, the terms “precious” and “semi-precious” fall into this vague and potentially misleading category.
Because of these and other variables, gem investing is not a guaranteed money-making venture. Those who don’t have gem evaluation skills or access to someone who does, will quickly learn that there are many pitfalls that afflict the small-time investor. With modern techniques, it is easy to pass off an artificial gem as the real thing. Likewise, enhancements make it possible to create the illusion of a gem being worth much more than its actual value. Even experts struggle with spotting these issues.
Many beginners flock to stones dubbed investment grade, only to find that they are not as high quality as they were led to believe. Even when a high end stone is verified to have significant worth, it may not be a good investment. High value stones often appreciate less and are harder to sell. For this reason, low to mid-priced gems may be the best option for beginners.
For the most part, a gem’s value increases comparable to the inflation rate. There are always exceptions, however, and investors shouldn’t rely solely on general trends when planning their purchases. By working with primary dealers, who personally cut the gems, you can get prices significantly below retail. Those who are unfamiliar with the primary and secondary gem markets can find regional information in trade magazines and on the Internet.
By eliminating as many middlemen as possible, you can get gems at wholesale value. As with most wholesale markets, you will get even better prices if you buy in bulk. This raises the stakes and makes it essential that the investor knows exactly what they’re buying and what it is worth. Due diligence is a crucial element of bulk buying success. Be patient and make informed purchases when the time is right.
If you have a passion for gemstones and have experience in the industry, investing may be for you. Those who don’t have a solid background in the industry should exercise extreme caution. Without the help of a trusted expert, they should never venture into the complicated world of gem investing. When done right, this can be an exciting opportunity to make money with something you love.