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Investing in Jewelry — is it a Myth or a Dream Come True?

Panthère de Cartier cuff-bracelet. Platinum, diamonds, sapphires, onyx  Vincent Wulveryck © Cartier 2009

While travelling in Russia, I noticed how consumers influence different industries.  Take for example the jewelry industry. It amazed me to see how many jewelry stores were in business, and the variety of international brands that were available. The ‘girly girl’ side of me was charmed, but at the same time, my rational side, influenced by a financial background, held its ground firmly. I thought to myself that there must be a way that would allow women not just to buy jewelry, but also to INVEST in jewelry. This way she can enjoy it and not feel guilty about the purchase because it’s an investment, or is it?

Margo Raffaelli

Margo Raffaelli on phone with editor of her book.

Margo Raffaelli on the phone with the editor of her book.

To work out if this idea is a possibility I met with independent jewelry consultant at one of the most glamorous galleries in Moscow situated in Red Square – GUM.

We took a short tour of the Square, taking notice to the different varieties and brands. Eventually, we landed at Bosco Café.

 Margo, a young and attractive businesswoman, has over 10 years’ experience in the jewelry industry. Her latest book “Jewels. Choose the best” is set to be released in the autumn of 2014, written in her native language – Russian.  Some articles in English are available online here  http://www.margoraffaelli.com/.

Margo, you’re an independent consultant who helps people with creating jewelry collections close to lux segment. Who are your clients?

– The majority of my clients are Russians, although I do have clients from other countries too.

Why are they asking you to help them? What is their purpose when they buy jewelry?

– In most cases, it is a present for themselves. They buy jewelry for their own pleasure. Sometimes women want to create a base jewelry collection that is useful in everyday life, and on special occasions. I had several clients who were asking my help to create a jewelry collection from an investment perspective as well.

Since the global financial market crashed in 2008, some people decided to invest differently as opposed to traditional investing methods. For instance, I know a person from the USA who has a financial background, and he stopped believing in governmental fiscal policy. So, he invested all his savings in to gold bullions.

Jackie O cuff bracelets, Van Cleef & Arpels. Gold © Courtesy of Van Cleef & Arpels

Jackie O cuff bracelets, Van Cleef & Arpels. Gold
© Courtesy of Van Cleef & Arpels

– In terms of investing in gold, I’m not sure that this is a wise investment. Gold prices are very floatable and difficult to predict. Stones however are constantly growing in price and is often a winning situation. But, you really need to understand what it is that you buy. Actually, it is similar to the stock market – if you don’t know anything about the stocks you buy, and the companies behind them, your investment will be equal to buying a lottery ticket. And, of course,the losses suffered during the crisis of 2008 have since been regained. However, a financial crisis does present a good opportunity to invest in jewelry because when purchasing power drops, so do prices.

How much should someone budget to get started in jewelry investing?

 – It is difficult to say, but I would consider a budget starting with $10,000 (7000–8000 euros). With this amount, you have better choices and better possibilities. From 40,000 euros per piece, you should start thinking about insurance. Anything less than that is not worth signing an insurance policy. 

 Ok, so we have the minimum budget. Where do we go from here? What country is better to buy in? Are the prices the same worldwide?

 –If a person has the possibility to buy jewelry in the country where it’s produced, then I would recommend him that.

 Do I understand you right, that collections have more value than separate pieces?

La Reina necklace. Baroque Columbian emeralds, white South Sea Pearls, diamonds  © The House of Rose

La Reina necklace. Baroque Columbian emeralds, white South Sea Pearls, diamonds © The House of Rose

– Yes, but the collection should be formed in the right way. You need to take in to consideration style, esthetic beauty, and overall cohesion of the collection – preferably, if pieces have practical aspects (easy to wear and good quality). I would always recommend finding a good jewelry consultant or a good gemologist. These people will tell you the true value of your future purchase, at least at the present moment, and will stop you from overpaying for the brand.

 So when investing in jewelry, we need to escape buying brands?

 – Yes and no at the same time. Investing in brand jewelry pieces can become the biggest success in your investing enterprise or the biggest failure. I would recommend buying two or three quality pieces instead of ten cheap ones.

 Are there any books that you can recommend to help people get inspired about starting a collection of their own?

 – There are not so many books on this subject. But to get inspired I can gladly recommend Jewelry and Gems at Auction  and Jewelry and Gems: The Buying Guide by  Antoinette Leonard Matlins and a special one by the same author writen for people in love looking for an engagement and/or wedding rings: Engagement and Wedding Rings: The Definitive Buying Guide for People in Love.

The discussion with Margo flowed nice and smooth as Louis Amstrong’s classic “What a wonderful world” filled the cafe. The customers were dressed from head to toe in the lux brands. The women there had at least 2 karats of diamonds each. My mathematical-oriented head started counting while the pragmatic side of me withered away.

Margo Raffaelli

Margo Raffaelli

 

Diamonds vs  Color Gemstones

Margo’s advice was great, but we are investors who need accurate numbers—right?

If we look at the latest trends in jewelry and gemstones, we will see an interesting pattern: diamonds losing their position to sapphieres and rubies mainly because women have started to admire colors.

Chloe Fuller even called this trend the “Kate Affect,”coming after Kate Middleton, the Duchess OD Cambridge, received a sapphire engagement ring.

“In the US and Germany there is a more pronounced movement towards coloured stones,” says Jaspreet Chawla, a London-based gemmologist. “Increasingly so after Kate Middleton wore a sapphire.”

© The House of Rose

© The House of Rose

According to ‘The Professional Guide to Gemstone Values’ the prices of gemstones have risen in the past 8 years, from 2006-2013.

  • Rubies +47%
  • Sapphires +37%
  • Diamonds +32%
  • Emeralds +6%

The only problem with color gemstones is that there is no grading system. “But if you want a top quality ruby or emerald, they will compete with diamonds on the same level,” says Martin Rapaport, whose company produces the RapNet index at its headquarters in Israel.

So…where’s my $10,000?  I’m ready to invest in a new amazing ring!

 

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  1. Pingback: Investing in Jewelry — is it a Myth or a Dream Come True? | Life as an Investment

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