Precious Gemstones For Investments Or Keeps

Precious Gemstones

Precious gemstones are a joy to behold for their sheer beauty. They are minerals, cut and polished for jewelry and adornments. Good quality gemstones, not only retain their value but appreciate over time. The following are some good reasons to buy them for investments as well as for keeps.

  • Precious gemstones especially diamonds retain their value unaffected by stock market crashes, inflation and other vagaries that can cause currencies to devalue almost overnight.
  • Precious gemstones never go out of fashion.
  • Precious gemstones are easy to store and transport. A high quality gemstone weighing as little as 2 – 3 grams can be worth as much as 100 kilos of gold. This extremely condensed value and portability makes it an attractive asset to own and transport in crisis.
  • Precious gemstones are near impossible to mess up. They can only be scratched by other diamonds. They are hardy investments that can be passed down for generations.


Know Your Gemstones

What do you look for in a real gemstone before buying? A buyer always weigh the following 4 characteristics often known as the 4Cs when considering a purchase.


Carat

The carat weight measures the mass of a gemstone. One carat is defined as 200 milligrams. All else equal, the price per carat increases with carat weight, but due to the popularity of certain sizes, the price per carat does not necessarily increase linearly with size. There are sharp jumps around milestone carat weights, where demand is higher for gems weighing just above than for those weighing just below a milestone. For example, a 0.95 carat (195gm) diamond have a significantly lower price per carat than a comparable 1.05 carats (210mg) diamond because of differences in demand.

Clarity

Clarity is not about the transparency of the gemstones. It is a measure of the internal and external flaws or defects of a gemstone. The internal defects are sometimes referred to as inclusions. Inclusions may be crystals of foreign materials or structural imperfections such as tiny cracks that appear whitish or cloudy. External defects are blemishes on the outside of the gemstones.

There are internationally recognized standards to grade clarity, based on inclusions visible to a trained professional when a gem is observed under 10 times magnification. Without 10 times magnification the inclusions are not visible with the naked eye.

Color

Color is the most obvious and attractive feature of gemstones. Even a subtle difference in color can have a dramatic effect on value. For example, the “fancy sapphires” also known as the padparadscha sapphires which exhibit a whole range of other colors from yellow to orange-pink, can command approximately USD 12,000 per carat for an orange-pink while, single hued orange sapphires are only in the USD2,000 per carat range.

Cut

The cut of a gemstone describes the manner in which it has been shaped and polished from its initial rough form to its final gem proportions. The skill with which a gem is cut determines its ability to reflect light back to the viewer also known as brilliance and its dispersive power to split white light into its component spectral colours, commonly referred to as fire.

All custom faceted gemstones have more value than the commercial cut gemstones because they are exclusive, rare and one of a kind. A good cut gives lots of flashes through facets on each side of the diamond whereas a poor cut allows the light to escape, creating a flat look with little brilliance and fire. Some cuts, such as the round brilliant, actually have 58 different facets or sides cut into the diamond to create the internal reflection.


What To Buy?

Best buy precious gemstones are those that are reportedly rising in value. To minimize risk, buy gemstones at wholesale or near wholesale price. Make sure they are internationally certified by reputable gemological laboratories such as Gemological Institute of America (GIA), European Gem Laboratory (EGL) or the American Gemological Society (AGS).

Currently, some of the popular precious gemstones people are buying for investments or keeps are:

  • the Kashmir colored sapphires.

  • the Paraiba tourmaline (the queen of tourmalines) found both in Brazil and Lorin, Nigeria.

  • the Zambian emeralds.

  • the “pigeon blood red” rubies found in the Mogok valley mines in Myanmar.

  • the pink diamonds found only in Australia which are 20 times more expensive than traditional white diamonds. For every 100,000 carats of diamonds mined, only one carat would be pink in color. Some of today's most popular colored diamonds are the purplish pink and pink diamonds from the Argyle mine in Australia. They came from the alluvial deposits, the watery areas surrounding the Arglyle mine. It is so rare that a loose pink diamond is considered a storage of great wealth.


Buyers Take Note

Though precious gemstones do have good outlooks for the future, they are also known to have low solvency levels. To avoid distress selling of precious gemstones, buyers must have sufficient personal liquidity, holding power and time.


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