Jewellery as an Investment: How to Spot Potential in the Market

Understanding Jewellery as an Investment

Unlike stocks or bonds, jewellery offers a tangible asset with intrinsic value. Precious metals like gold and platinum can hold a steady worth, while rare gemstones like emeralds and sapphires often command high prices. Unlike depreciating assets like cars, it’s possible for well-chosen jewellery to appreciate in value over time.

However, not all jewellery is a good investment. Key factors to consider include:

• Rarity: Scarcity drives value. Limited edition pieces or those with unique gemstones are more likely to appreciate.

• Demand: Jewellery with timeless designs and enduring popularity will hold its value better.

• Historical Significance: Pieces with a rich history or provenance, like signed pieces by famous designers or jewellery with a royal connection, can be highly valuable.

Common Types of Investment-Worthy Jewellery

Certain types of jewellery are more likely to hold or increase in value:

• Natural Diamonds: High-cut, clarity, colour, and carat-weight diamonds are common investment choices. Collectors often prefer certified stones from reputable gemological institutes. The higher the purity of your diamond, the more likely it will hold its value over time. Natural Diamonds are also a scarce resource and are therefore affected by supply and demand.

• Rare Gemstones: Emeralds, rubies, and sapphires in exceptional quality and large sizes are valuable investments. Rubies have historically shown an average appreciation rate of around 8-10% per year.

• Gold: Historically retaining its value over time, gold has increased its price by around 176% since 1975.

• Prestigious Brands: Established jewellery houses like Cartier, Tiffany & Co., and Van Cleef & Arpels create pieces that appreciate due to their brand heritage and recognition.

The Appeal of Investing in Antique Jewellery

One of the most popular and accessible ways to begin curating your collection is by investing in antique jewellery. 

Periods like Art Deco (1920s-1940s) and Victorian (1837-1901) are revered for their craftsmanship and design innovation, making them popular choices for both investment and personal collections. 

Jewellery by renowned brands like Cartier, Tiffany & Co., and Bulgari from these eras can fetch significant sums at auctions. However, authenticity is paramount. Always seek reputable jewellers or gemological labs for verification. 

Regular cleaning with gentle polishing cloths and proper storage in tarnish-proof boxes safeguard your vintage treasures, ensuring their beauty and value endure for generations.

Assessing the Quality and Authenticity of Jewellery

Verification is crucial before investing in jewellery. Here's how to assess quality and authenticity:

• Gemstone Quality: Look for certificates from reputable gemological institutes (such as GIA and IGI) that assess cut, clarity, colour, and carat weight of diamonds and gemstones.

• Hallmarks: These tiny markings on precious metals indicate the type and purity of the metal.

• Craftsmanship: Look for well-made pieces with intricate details and high-quality settings. Consider getting valuations from certified professionals for valuable pieces.

Reputable jewellers and auction houses often provide detailed descriptions and authenticity reports for their pieces.

Researching Market Trends and Historical Data

Jewellery collectors can navigate the market by exploring historical data and ongoing trends. Following prestigious auction house results, like record-breaking sales at Sotheby's or Christie's, is a fascinating way to explore which designers, gemstones, and styles command premium. 

You can also explore online platforms like the Rapaport Price List, which provides data-driven analysis of price movements for specific jewellery categories and gemstone qualities. Becoming familiar with these resources will help you develop a keen eye for prized jewellery pieces and how their value evolves over time.

The Role of Provenance in Your Jewellery Collection

More than just a record of ownership, provenance provides jewellery with a unique historical narrative. Documented ownership by celebrated personalities or historical figures often elevates a piece to a coveted collector's item. 

A captivating backstory regularly fuels demand, and such stories can often be seen in famous auction house sales. For example, in 2011, a pair of diamond earrings once adorning Elizabeth Taylor shattered estimates and sold as part of a record-breaking sale that raised a total of $116 million at auction. 

Provenance acts as a powerful authenticity marker, solidifying the piece's legitimacy and historical significance. But beyond this, it's a unique way to bring your jewellery collection to life with fascinating historical stories.

Stories of Star-Studded Jewellery Sales

The history of jewellery is filled with fascinating stories and unique pieces that have fetched record-breaking prices at auction. Here are some of our favourites: 

The Duchess of Windsor's Jewellery Collection (2010)

The personal jewellery collection of Wallis Simpson, the Duchess of Windsor, achieved a record-breaking $12.5 million at Sotheby's London. This sale, which included an iconic onyx and diamond Cartier panther bracelet, exemplifies the power of provenance. The Duchess's iconic status and the pieces' historical significance certainly boosted their value.

Barbara Hutton’s Jadeite Bead Necklace (2012)

Jadeite is a revered gemstone in Chinese culture and this sale captured the spotlight at Sotheby's Hong Kong. A necklace auctioned by Tiancheng, featuring 27 emerald green jadeite beads with exceptional translucency, fetched a stunning $27.6 million! This sale highlights the immense value placed on quality jadeite within the Asian markets.

The Memory of Autumn Leaves & Dream of Autumn Leaves (2017)

This elegant set of coloured pear-cut diamonds, sold for $57.4 million at Sotheby's Geneva in 2017. Featuring one blue and one pink stone weighing 14-16 carats, they are currently the most expensive pair of earrings ever sold at auction.

The Risks and Pitfalls of Jewellery Investment

Jewellery investment is not without risks. While jewellery that holds value can be acquired with savvy choices, the reality is that most jewellery will depreciate over time. In addition to this, here are some key factors to consider when purchasing jewellery:

• Market Volatility: Like any investment, jewellery markets can fluctuate. You could diversify your portfolio to mitigate risk.

• Counterfeit Pieces: Investing in jewellery with reputable jewellers and auction houses helps avoid forgeries. Get professional valuations before making significant purchases.

• Risk Management: Diversifying your investment portfolio across different jewellery types and price points may manage risk. Consider jewellery insurance to cover your collection against loss or damage.

Ultimately, the best decision is to buy jewellery that you’ll love to own and wear. Let style and taste guide your collection while building your knowledge and expertise in jewellery investment.

The Journey of Building Your Jewellery Collection

Constructing a successful jewellery collection requires a strategic approach. The first step is to clearly define your goals and budget. In-depth research into various jewellery categories is then essential to identify pieces that align with your strategy. 

Consider incorporating a balanced mix of high-risk, high-reward options like rare gemstones, alongside lower-risk classic pieces such as diamond solitaires. Remember, an element for consideration in long-term success is regular portfolio rebalancing to ensure a healthy balance between potential growth and risk mitigation.

Jewellery Investment FAQs

Is jewellery a good investment?

Jewellery can be a good investment due to its intrinsic value, rarity, and demand. Pieces with unique gemstones, historical significance, or from prestigious brands tend to appreciate over time. Investing in high-quality diamonds, rare gemstones, and antique jewellery can offer both financial returns and personal enjoyment.
*important reminder: not all jewellery is a good investment.

How do I assess the authenticity and quality of investment jewellery?

To assess the authenticity and quality of jewellery, look for certifications from reputable gemological institutes, such as GIA or IGI, which evaluate cut, clarity, colour, and carat weight. Examine hallmarks on precious metals for purity, and consider the craftsmanship of the piece. Reputable jewellers and auction houses often provide detailed authenticity reports.How do I assess the authenticity and quality of investment jewellery?

What are some common types of investment-worthy jewellery?

Common types of investment-worthy jewellery include high-quality diamonds, rare gemstones like emeralds, rubies, and sapphires, and pieces from prestigious brands like Cartier, Tiffany & Co., and Van Cleef & Arpels. Antique jewellery from renowned periods such as Art Deco and Victorian is also highly valued for its craftsmanship and historical significance.

Conclusion: Build Your Knowledge and Create a Jewellery Collection You Love To Wear

Learning about jewellery investment is a fascinating way to develop your collection and gain insight into the market's intricacies. By educating yourself and choosing pieces wisely, you can build a collection that transcends trends and is enriched by your knowledge of jewellery sales and transition. 

At JewelCover, our jewellery experts are here to support your growing collection. Our jewellery insurance in Australia provides cover against loss, theft and damage, so you can buy and wear the pieces you love most with cover. To get a quote on jewellery insurance in seconds, try our online quote calculator today!

This article is advisory in nature and is offered as a resource to be used together with your professional insurance advice. It is an overview only and is not intended as a substitute for consultation with your insurance advisor or other professional advice.