Gemology is the practice of identifying, studying and evaluating gemstones. Gemstones can be extremely valuable, and because they carry an additional aura of mystique, they have become a hot investment alternative.
Traditionally, gemstone investing has happened in the exclusive circles of certain families. A few families in Belgium, Holland, New York, Israel, Africa, Brazil and India have been involved in most of the trade of large stones. Lately, these closed circles have (by necessity) started to open up to outside investors who are willing to part with hundreds of thousands - if not millions - of dollars in exchange for a piece of the action. The main reason why new financiers are being let into gemstone circles is that more stones than ever before are being found and, as a result, buyers and traders need more money to continually finance the purchase of stones.
For those with the means and the connections, gem investments offer a great opportunity for diversification. The price of a gem has more to do with the characteristics of the stone itself, not the market in which that stone trades. Gem investing is also a great way to realize exceptional returns in a flat stock market. Even in the most bearish of markets, uncut gems can still be cut, increasing their worth by as much as hundreds of times their original price. Furthermore, buying one of the rarest materials on earth in a lavish London auction house such as Sotheby's or Christie's, having it cut in Antwerp and then selling it in Dubai is a thrill ride that would excite any tycoon.
The Basics of Gem Investment
First of all, there are thousands of kinds of valuable stones, but gemstones are usually limited to emeralds, rubies, sapphires and, of course, diamonds. Gemstones are valued according to a number of characteristics and increase in value exponentially if they have a perfect combination of the most desirable characteristics.
In general, the larger a gemstone, the higher its worth - even small increases in size affect the value of a stone.
A stone's grade - which is directly related to the stone's clarity - also works to determine its price tag. Two things contribute to grade: the purity of a stone and its likelihood of cleaving (breaking). Stones with no flaws are almost completely pure and are less likely to cleave during the cutting process.
The color of precious stones has always been important to valuation, but in the last decade, colored stones have experienced tremendous price appreciation. Depth of color and intensity are two of the terms that are frequently used by gemologists to describe gems. Colored diamonds, in particular, have become extremely sought after in North American markets. In fact, large, intensely colored, flawless diamonds are among the most valuable luxury items on earth.
Like precious metals, gemstones are internationally priced in U.S. dollars.
Conclusion
No matter your time horizon or your willingness to bear risk, unless you're dealing under the guidance of a reputable professional, gemstone investing is as close to gambling as you can come without setting foot in a casino. If you are considering investing some of your risk capital in gemstones, be prepared to spend some money on professional assistance, and remember, as always, that high potential returns always come with significant risk.
No matter your time horizon or your willingness to bear risk, unless you're dealing under the guidance of a reputable professional, gemstone investing is as close to gambling as you can come without setting foot in a casino. If you are considering investing some of your risk capital in gemstones, be prepared to spend some money on professional assistance, and remember, as always, that high potential returns always come with significant risk.
Gems Investors Ltd www.gemsinvestors.com
Online Gems Appraisal www.gemval.com
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