Over the last few years the global economy has known many ups and downs. It’s during these difficult times that people start to look for real alternatives to invest and protect their money.
Through these times investors yet again appreciate the advantages and value of physical commodities. This is the reason why we see the increase in the value of gold, silver, platinum and diamonds.
Throughout the ages investing in diamonds and precious metals has been a successful way to not only preserve your money; but also have a good return on investment. Diamonds have always maintained their value over centuries and are synonymous with stable value. It’s with good reason that diamonds have been considered the “worlds hardest currency”.
Over the past 30 years the price appreciation of natural, especially coloured diamonds have dominated the market. A yearly increase of diamond prices and value is at +14.47%. Equal to a yearly compound interest of 4.3%. Diamond prices per carat have shown a consistent positive and increasing trend.
As the known global diamond reserves continue to be mined and depleted while the global demand for diamonds increases, a diamond demand supply is expected to develop in the coming years. While South Africa alone produced around 9,9 million carats of diamonds in 2018 (R17.3 billion in total sales), a demand gap is forecasted for 2050 which will result in a steep price hike per carat for natural diamonds and a continued increase in value.
Investing in custom jewelry has been an obvious choice for centuries.
It is durable. Especially when it comes to diamonds – it doesn’t break or wear off.
You can enjoy it while you have it. Since the value of your diamond set in a custom made ring is based on Carat, Colour, Clarity and Cut, its value will not decrease because it has been worn or used (unlike cars) its value will in fact still appreciate over time.
It’s Inflation proof. This is true to most physical commodities. Gold, Silver and Diamonds usually appreciate in compliance to inflation.
When buying customized jewelry such as engagement rings or wedding bands, you are not only adding value through your chosen precious metal but creating an heirloom for generations to come. There is something intrinsically magical about an heirloom engagement ring. From its one of a kind appearance to its rich history and its sentimental value.
Passing down a Diamond ring or wedding bands from generation to generation, not only saves money for your next generation, but you are able to keep your investment going while it is growing. It can become part of the next generation’s investment portfolio. Alternatively you can keep it as an asset and pass it down through your Testament or WILL. Jewelry is a valuable inheritance asset that is tangible and small enough to keep in a small safe, or hide away. It’s an easy asset to travel with without any complications.
When investing in custom jewelry, wedding bands or engagement rings there are a few things to consider before buying:
- Make sure the gemstone meets the minimum requirements using the 4 C’s: Carat, Cut, Colour, Clarity. It is a combination of these that determines its value.
- Make sure you contact an expert for advice. A specialist will give you more information on the best investment strategy for you, while a retail salesman will only sell you a stock item with often a much lower value than the price you would pay. Someone whose reputation is at stake will always give you much better advice and direction than someone behind a counter.
- When buying custom Jewelry or diamonds for investment, make sure you buy it reasonably close to the source price and higher up the supply chain to eliminate additional costs that were added on. This way you will be able to resell your piece at a later stage and still make a profit. Typical retail chain stores usually have higher overhead costs (resulting in higher mark-ups) and mass produced jewelry that will lower its longevity.
- Always have your jewelry or diamond graded by an independent third party. Many experts have referred to the “5th C” (not only the 4 C’s) when it comes to diamonds… and that is “Certificate”. Having the proper certification, not just from a jewelry store but from an internationally recognized institution such as the Gemological Institute of America (GIA). This will ensure you are not investing in a lower grade diamond, a conflict diamond or a fake. It will also add value and ensure the value of your piece appreciates with time if you will ever consider reselling it.
There are many advantages when it comes to investing in fine jewelry. It is portable, its value will not go down, there are no holding costs, it’s not affected by the Rand and Dollar fluctuations, you can appreciate it over time and it’s traceable.
Jewelry has such a prestigious reputation simply because of its worth and ability to last beyond a lifetime. The beautiful fact about investing in good quality engagement rings and wedding bands is the possibility of your customized piece being passed down to future generations. It is sure to be your most beautiful investment yet.
– Venesia van den Berg (founder of Keeva Collection)