The Smart Girl’s Guide to Investing in Jewellery

A handy primer on why jewellery is a valuable, long-lasting store of wealth

Critics argue that jewellery rarely appreciates as much as other investments. Experts, however, recommend looking at the segment differently. “If you want to invest, you have a million avenues, from stocks and gold to real estate. However, much like art, jewellery is a good store of wealth which can be passed down across generations as an heirloom,” says Siddhartha Sacheti, CEO and Creative Director, Jaipur Gems, a sixth-generation jeweller.

In the post-pandemic era, consumers want to buy fewer but better things. “Having literally spent the lockdowns working from home, consumers are realising that they would rather put their money into something of more lasting value, such as natural diamonds,” says Richa Singh, Managing Director, India and Middle East, Natural Diamond Council, referring to how the diamond industry thrived ast year. In 2021, the personal luxury and diamond jewellery markets experienced decade-high growth (+35 per cent and +29 per cent respectively) according to a diamond industry report by the Antwerp World Diamond Center (AWDC) and Bain & Company. “Everyone wants to live in the moment. Having removed expensive luxury items from that pedestal, consumers want to enjoy what they have and are increasingly wearing their solitaires to the gym, or that gold Rolex on school or grocery runs," says Singh.

As consumers gravitate towards jewellery they can enjoy and invest in, experts weigh in on some tips you can use.

Making a choice

“The pieces you buy should foremost please you, you should enjoy them and look after them to keep their value safe. This is true for vintage, modern or new pieces of jewellery,” says Rahul Kadakia, International Head of Jewellery for auction house Christie's. As a rule of thumb, buying the best piece available on the market for the budget you have set aside to make this purchase is also prudent. For instance, buy the better coloured diamond rather than the larger one in carat size.

Educating yourself is another good way to snag a good bauble. “As with every investment you need to understand the market, trends, the history of the brands as well as possessing a trained eye to make long-lasting investments,” shares Kadakia.

Gold

Culturally considered as a form of adornment and investment in India, gold is the top pick when it comes to prudent investing in jewellery. Experts suggest investing in gold at two opposite ends of the spectrum–gold coins which are 24 carat and have 99.5 per cent purity and are easy to liquidate and good stores of wealth, or gravitate towards exceptionally beautiful, handcrafted gold jewellery pieces.

“Traditionally, beautifully handcrafted pieces, such as temple jewellery, are considered good stores of value. One would buy them as you would buy art, to appreciate the impeccable craftsmanship, to wear, enjoy and pass on to the next generation,” says Sacheti, as craftsmanship would account for 35-50 per cent of the cost of gold. “At the other end, whenever there is uncertainty in the market, everyone is rushing back to the basics, pumping their money into gold to secure their wealth. The best hedge against inflation, then, is to put your money into gold coins,” he says.

He advises clients to insist on hallmarked jewellery, which offers consumer assurance about the quality of gold they are buying.

Diamonds

After gold, diamonds are considered a good store of wealth as they can be certified in a structured manner.

It is prudent to buy diamonds that have been certified by a reputed body. The Gemological Institute of America (GIA) has a globally accepted standard for describing diamonds based on the 4Cs: Colour, Clarity, Cut and Carat Weight. Of the four, cut is the most important as it defines how much a diamond sparkles. Higher the clarity, the better the diamond. Flawless diamonds have the highest clarity and command a premium. Colour is defined in terms of grades D to Z. Colourless diamonds graded D are the most valuable. Carat defines a diamond’s weight. The appreciation for the stone only grew in 2021, with the demand for diamond jewellery outstripping demand for other luxury categories. “The year 2021 has been the strongest for us in the last decade and we have registered growth of around 15 per cent over the 2019 performance which was our best year,” said Sachin Jain, MD, De Beers India.

Other gemstones

While natural diamonds reign supreme as investments in stones, they are followed closely by the ‘Big Three,’ namely emeralds, rubies and sapphires. Picking a good gemstone can be tricky, owing to several factors. Valuations are not just based on its characteristics but also what people are willing to pay, making it a slightly volatile investment. Origin is an important consideration. The top emeralds are mined in Colombia and Zambia, the finest rubies coming from Burma and Mozambique, and for sapphires, the cream of the crop hail from Kashmir, say experts.

If a piece of jewellery features coloured gemstones, it is important that you receive a complete, accurate description of the gems before investing. “This might include a gemological certification to identify the nature of the gemstones, assess their quality (colour, transparency) and disclose any treatments. The expert opinion should reflect the quality and hence the price of your gemstone jewellery,” says Elena Basaglia, gemologist, Gemfields.

An important factor to consider before investing is to check the treatments your stone may have undergone for enhancement. Most emeralds are treated in some way, to fill surface-reaching cracks, to improve their clarity and sometimes their stability. Common treatments include the use of oil and polymers. “There’s nothing wrong with buying an enhanced stone, as long as the degree of enhancement is reflected in the price—a beautiful, untreated emerald will be worth far more than a beautiful, treated emerald,” says a Christie’s jewellery expert.

Provenance matters

Much like in art, the provenance of the piece of jewellery you’re investing in is a good indicator of its worth. The historical record of ownership can add value to a piece, particularly if it was worn by a person, or manufactured by a jeweller, of note. Pieces owned by royalty hold significant interest and command a premium on the market.

Everything from a jewellery maker’s mark, hallmarks, sales records, gemological laboratory certificates to jewellery boxes can contribute to the provenance. “Antique and heritage pieces continue to hold decent value, as most gemstones used at the time were largely natural and therefore untreated, with a great emphasis on design,” explains Sacheti. Unfortunately, as with most heirloom pieces, most owners lack the paperwork to authenticate it. If you own a piece of heritage jewellery, start collecting the paperwork as it can add value. This could range from the invoice for that piece and the original box to photographs of the person wearing it. “As time goes by, the provenance of your gemstone is going to determine how much value it is worth, how much value it is going to store for you and how much it’s going to appreciate in the future,” he says.

Provenance is important for newer pieces and stones too. A 2021 Diamond Insight Report titled Sustainability: Shaping the Future of the Diamond Sector by De Beers Group, found that sustainability-conscious consumers were prepared to pay a premium for natural diamonds that provide evidence of sustainability credentials.

Rarity

Rarity is deemed to be the most relevant factor for a jewel to hold value over a longer period of time, say experts. “Big money chases rarer things,” says Sacheti. Coloured diamonds, for instance, are very sought after and high on the aspiration list.

The rarest gems are those with the most desired characteristics of ideal colour and clarity features, coupled with transparent background information and perhaps an unusual size. For instance, a fine quality Burmese ruby can be more expensive than a diamond of the same size. “One way to gauge rarity would be to look at recent sales at auction houses to identify the gemstone jewellery categories that performed best in recent history, and find the common denominators to inform your decision,” advises Basaglia.

Pick a known brand

What’s in a name? Everything, actually. Buying jewellery from an established brand can ensure that your investment holds its value over time. Brands such as Cartier, Van Cleef & Arpels, Boucheron, Bulgari and Harry Winston, among others, are strong investments because their jewellery is known for its quality, impeccable craftsmanship and distinctive designs. Limited-edition pieces or signed pieces bearing the stamp of the jeweller are more sought after.

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