For investors seeking an alternative asset which will rise in value, diversify their value, and to top it all off, can be worn and serve as a status symbol, jewelry investment is worthy of consideration. Like with real estate and investment art, investors must be careful to do their research and find an asset from a reputable source with underlying value which will rise.
Not all jewelry is equal and will rise in value, so it’s vital for investors to find jewelry which historically has risen in value and likely will continue to rise, authentic pieces not knock-offs, and items in good condition which can be stored properly. This guide will walk you through the details of jewelry investment, what to consider when purchasing a piece, and alternative ways to invest in jewelry without breaking the bank.
First, let’s address the question of whether jewelry increases in value.
Does Jewelry Increase in Value?
Some jewelry does increase in value. Luxury jewelry including watches like Rolex or Omega, or luxury pieces from brands like Bvlgari or Cartier often rise in value. Due to their brand name designers, high-quality crafting, and rare materials used assist the increased value.
Rarity drives value for these pieces especially if they’re made in a limited run which will never be replicated. Jewels like diamonds or metals like gold being used in the crafting will also assist the value increase as these materials are valuable on their own.
When hoping for an increased valuation of jewelry, the quality of these pieces are important so if you hope for your item to rise in value definitely take care of these pieces and keep them in good condition.
How to Invest in Jewelry in 6 Steps
These six steps will walk you through the process of investing in jewelry directly, what to expect, and the risks to look out for as you do your research.
1. Consider why you’re buying jewelry
Before purchasing a piece of jewelry as an investment, consider if you plan to wear this item and how often, if so. If investment is a secondary motivation and you’re primarily interested in buying a piece of jewelry for personal use, you should prioritize the enjoyment you’ll receive from owning and wearing this piece. This may affect which brand or item you buy and how often you wear or service this item.
If you’re looking primarily for a piece of jewelry for investment, you should pick a piece as you would any other investment, carefully selecting the item, learning how to store it effectively, service it, and wear it on special occasions. All for the purpose of later increased value and its sale.
2. Research brands
Learn about the brands in the space you’re researching – some brands are known for their luxurious materials and long-term value which will help narrow your research. For example, Cartier and Rolex are excellent brands which retain value well.
If you’re considering a more recently popular brand, consider if the item will increase in value and why. Perhaps the material and quality are excellent and this brand has staying power.
3. Factor in rarity
Limited runs of items will increase their value, especially if the brand has a history of long-term valuable items from limited runs. If materials used in the piece of jewelry are rare and made of precious gems or gold, these items are more likely to rise in value over time.
4. Buy at the right time
Consider if you’re buying at a time when prices have peaked by consulting charts of the value of items over time. For example, the market for luxury watches is cyclical and rare watches will rise and fall in value, depending on the piece. If prices are at an all-time high, it may be smart to wait until the market falls again to take advantage of deals.
5. Consider buying second-hand jewelry
Buying second hand can be an excellent way to acquire a piece at a discounted rate if it’s in good quality. This could provide access to a more rare piece or popular item which retains value like an Omega Speedmaster.
Before purchasing an item second-hand, make sure to research what you should expect from the item to confirm its authenticity like a box, engraving, or papers. Make sure the source where you buy the item is also well-respected and confirmed to sell authentic items.
6. Consult with a trusted jeweler or expert
If you know a jeweler with expertise in investing in jewelry, it would be smart to consult with them about the jewelry you’re considering for a second opinion. It may be even worthwhile to pay a fee for their third-party expertise before making a big purchase. Another way to access the market and receive insights could be to visit multiple respected jewelers for second opinions before making a purchase.
Don’t allow yourself to be bullied into making a purchase right away, take your time and make an educated decision.
Best Types of Jewelry to Invest In
Learn the best types of jewelry for investment including rings and necklaces, and which brands to pay special attention to before making a purchase.
1. Luxury Watches
One excellent type of jewelry investment is luxury watches. These pieces have long-term value when they’re cared for, have robust processes for repair, and an active secondary market. Some of the best brands to consider for watch investment are Rolex, Omega, and Cartier. These brands retain their value and have watches at different price points for every investor. Some watches from each of these brands like the Rolex Datejust are more common than others and will have lower margins for investors.
2. Vintage Jewelry
Another excellent asset to consider is vintage jewelry. There are beautiful pieces you can find from rings to earrings which look great and retain value. Vintage jewelry may require more up-keep due to its age but it’s worthy of your consideration as a jewelry investment.
3. Luxury Bracelets
Luxury bracelets like tennis bracelets are often diamond encrusted and beautiful pieces which can be actively worn. Some bracelets to consider as jewelry investments include Cartier bracelets and Van Cleef & Arpel bracelets. With good care, these pieces will likely rise in value.
Necklaces are another type of jewelry to consider when investing. Valuable necklaces often are made of precious metal and jewels like diamonds or other gems. Tennis necklaces made of diamonds or pearl necklaces are classic pieces which will retain their value.
Diamond rings or rings made using other gems are also valuable long-term investments. Higher quality diamonds which are authentic and not man-made command more value due to their rarity so if you’re considering investment in diamond rings make sure to ask about the source. A good example of an investment ring is the Chaumet Josephine ring.
Invest in Jewelry Stocks for Passive Investment
If you want passive exposure to jewelry without making a big purchase up-front, you can invest in stocks or ETFs. This will provide you with returns and even dividends on companies selling jewelry and luxury goods. Below are some stocks and ETFs to consider for a passive jewelry investment.
Tiffany and Co. is a luxury jewelry company based in Manhattan which designs and sells jewelry, watches, and other luxury goods. This well-known brand has a good track record of success on the stock market and consumer space and is worth your consideration.
Signet Jewelers (SIG)
Signet Jewelers is the world’s largest retailer of diamond jewelry and operates companies like Zales and Kay Jewelers. This firm also boasts a dividend yield of 1.14% so you’ll earn dividend income in addition to returns.
SPDR MSCI Europe Consumer Discretionary UCITS ETF
This ETF tracks the performance of European large and mid-sized companies in the Consumer Discretionary industry. Companies in the ETF’s index include LVMH Moet Hennessy Louis Vuitton SE and Compagnie Financiere Richemont SA which sell jewelry and luxury goods.
Is Jewelry a Good Investment?
Yes, jewelry can be a good investment for investors seeking exposure to alternative assets which includes jewelry or other luxury goods. Like with all alternative assets, doing research into which jewelry to purchase, finding a good price, and learning how to protect your investment is key to your investing journey. With this guide, hopefully you’ve learned how to choose jewelry investments, the best items to invest in, and alternative methods to jewelry investing.
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