Precious Stones As An Investment

Historical Performance of Precious Stones

For over 5,500 years, gemstones have served as a method of preserving personal wealth and have been traditionally adorned by monarchs as part of their regal jewels, ensuring these precious stones become a part of their heritage. While diamonds are the most famous of these gems, they do not possess the highest concentration of value and exhibit relatively low appreciation. Instead, rubies hold the highest value concentration with an annual growth rate of 8-10%, followed by blue sapphires at 6% per annum, and emeralds at 5% per annum.

Gemstones have consistently demonstrated resilience and appreciation in value throughout history. As a tangible asset, they have shown a low correlation to traditional financial markets, making them an attractive diversification option for investors. In times of economic uncertainty or geopolitical instability, gemstones have often retained or even increased their value, providing a sense of security for those who invest in them.

Movability and Tax-Free Capital Gains

One of the key advantages of gemstones as an investment is their movability. As a portable, tangible asset, gemstones provide investors with easily transportable wealth that can be carried across borders and liquidated when needed. This portability offers a unique benefit compared to other investment options, such as real estate or stocks.

In New Zealand, gemstones can also offer tax-free capital gains. Unlike other financial assets that may be subject to capital gains tax, gemstones held as personal property and sold for a profit are generally not taxable. This tax advantage further enhances their appeal as an investment option.

What Makes a Gemstone a Sound Investment?

When considering gemstones as an investment, it’s crucial to understand the factors that contribute to their long-term value and potential for appreciation. In this section, we will delve into the specific types of stones, their attributes, and the types of jewelry that have historically provided outstanding returns.

Colored Gemstones: Rarity, Quality, and Demand

Colored gemstones, such as sapphires, rubies, and emeralds, are highly sought-after for their vibrant hues and unique properties. These stones are often rarer than diamonds, making them more valuable and appealing as an investment. When evaluating colored gemstones, consider factors like color saturation, clarity, and the stone’s origin. High-quality, vividly colored stones from reputable sources can command premium prices and offer excellent potential for appreciation.

Investment-Grade Diamonds: Carat, Cut, and Clarity

Investment-grade diamonds are another attractive option for gemstone investors. These diamonds typically have a high carat weight, exceptional cut, and excellent clarity. Larger, high-quality diamonds are rarer and often appreciate more in value over time, making them a desirable choice for investors. Fancy colored diamonds, such as pink, blue, and yellow diamonds, are also highly prized for their rarity and unique beauty, offering additional investment opportunities.

Types of Jewelry with Outstanding Returns

Historically, certain types of jewelry have provided outstanding returns for investors. These pieces often feature exceptional gemstones or unique designs that are highly desirable in the market. Examples include:

1. Vintage and Antique Jewelry: Pieces from iconic periods, such as Art Deco, Victorian, or Edwardian eras, are highly collectible and can appreciate significantly in value due to their historical significance and rarity.

2. Rare Stones of a Certain Size and Clarity: Jewelry featuring rare, high-quality gemstones with exceptional size and clarity can hold their value and appreciate over time, particularly when they are sought after in the market.

3. Bespoke or Custom Jewelry: Unique, one-of-a-kind pieces designed and crafted by skilled artisans can hold their value and appreciate over time, particularly when they feature high-quality gemstones and exceptional designs.

The WRB Advantage

At WRB, we are dedicated to helping our clients make informed decisions about their gemstone investments. Our commitment to sourcing the finest gemstones directly from their origins, such as Sri Lanka, India, and Thailand, ensures that we offer unique, rare stones at unmatched prices. All our products are GIA certified and appraised, guaranteeing the highest standards of quality and authenticity.