photo: alisamii
When Sweden’s Crown Princess Victoria wed on June 19, 2010, it was the royal event of the summer: 1,200 guests glided through the lavish ceremony and thousands of onlookers lined the streets to catch a glimpse of the fairytale couple as they rode in their horse-drawn carriage.
Topping Victoria’s look was a tiara made of gold, pearls and cameos, the center of which depicted Cupid and Psyche from Greek mythology.
Rumored to have been owned by Napoleon’s Empress Josephine, the Cameo Tiara has been in the Swedish royal family since the early 1800s when Josephine’s granddaughter Josefina married the future King Oscar I.  Victoria’s mother, Queen Silvia, wore it on her own wedding day too: a sentimental heirloom, as well as one worth millions, a tidy investment made a few centuries ago.
The same can be said for England’s Crown Jewels, said to be worth upwards of $30 million.

Jewels: Not Just for Royals

Investing in gems does not have to be relegated to rich royalty. You, too, can make money investing in gemstones, as long as you pick a strategy that works for you.
There are two main ways for retail investors to invest in gems: buy the hard asset or invest in a proxy, such as an individual stock or ETF. Both have inherent risks and variable rewards that depend on your level of risk tolerance.

Buy a gem

A stock can lose all of its value, especially if a technology or competitor comes along to make the company obsolete, but as the saying goes, “a diamond is forever.”
Gems have intrinsic value that withstands the test of time. Even with the global downturn decimating markets, the price of precious gemstones – emeralds, rubies, sapphires, diamonds – is at or above 2008 levels. As a rule of thumb, gems increase in value at the rate of inflation, so though you won’t get double-digit gains, you do get a store of security.
In general, however, if you are interested in buying gems as an investor, a jewelry retailer is not the place to go. Much as you like wearing your ruby pendant from Macy’s or diamond ring from Tiffany, those pieces have been marked up several times before making it on your finger or around your neck. Jewelry bought from a store is meant to make you pretty — but don’t expect it to make you rich. (Obviously, here we exclude pieces with collectible value, such as jewelry once owned and worn by celebrities or extremely rare stones.)
If you are seeking out gems as an investment, you will need to buy below retail: go to primary dealers or wholesalers who mine or cut the stones themselves. You can also look for pre-owned gems at flea markets, pawnshops and estate sales. It takes patience, and a little bit of luck.
(The Gemological Institute of America offers a gemstone buyer’s guide. If you are not a gem expert, find a gemologist to speak with before you make any purchases.)
If you buy popular gemstones, you have a better chance of reselling them for a profit later on. Some that are currently in vogue are color gemstones like emeralds, rubies, and sapphires. If you have the means, you will get a better deal to buy in lots than single stones.
When you want to sell a gemstone, auction houses, online auctions and jewelry stores can be potential buyers. If you make a profit, you will owe capital-gains tax on it — or you can make a tax-free exchange if you trade your gem for one of equal value, or defer taxes if you trade up.
Gems Investors: www.gemsinvestors.com