A Guide To Buying Jewellery As An Investment
Did you know that the price of gold reached an all-time high on the 7th August 2020? With this in mind, it’s no surprise that more people than ever are learning how to invest in gold jewellery.
With the current Coronavirus pandemic shaking up the global economy, stock market investments are no longer as safe as they once were. This has forced investors to increase their stock in alternative, more reliable investment sources.
In this blog post, we answer all your questions about investing in jewellery.
Why Is Gold Jewellery A Good Long-Term Investment?
When compared to other popular long-term investments, gold has long been considered a reliable option. There are many reasons for this, but primarily because the price of gold rarely decreases and is known to increase in times of economic hardship — unlike most other investments. Because of this, investors often include gold in their portfolios, utilising this precious metal as a hedge against inflation.
The price of gold increased during the 2008 financial crisis, and it is currently the case during 2020’s global pandemic. Even since January 2020, the average price of gold has increased from around £37/g to around £47/g.
The minimum buy-in for gold jewellery is also significantly lower than if you were to buy other reliable long-term investments such as real estate. For example, the minimum buy-in for real estate is usually around £75,000, whereas you could buy a solid gold ring for as little as £250.
In addition, you can even wear your investment as a fashion statement without affecting its value, as long as it is properly cared for.
How To Buy The Right Gold Jewellery Investment Piece
Firstly, and most importantly, it’s crucial to ensure that you’re buying your jewellery from an authentic, reliable supplier. Many less reputable brands are known to offer costume jewellery — i.e. gold-plated — whilst labelling it as authentic fine jewellery. Buying inauthentic pieces is an easy mistake for junior investors, and one that happens all too often.
In order to ensure the authenticity of your supplier, try and find some customer reviews from a genuine review website such as Trustpilot.
All trusted online jewellers should have an Assay Assured certificate or be listed in Assay Assured’s online jewellery retailer directory. Finally, we’d always recommend buying investment jewellery from a jeweller that offers returns, just in case it isn’t quite what you expected.
Less Manual Labour = Better Investment
Now this might be slightly counterintuitive — many people think the more attention-to-detail and care that goes into a piece of jewellery, the more expensive it will be. And this is true, but it also means that you’re paying for labour on top of the value of the physical gold and gemstones that are used. With this in mind, it’s understandable why only a very small percentage of complex jewellery pieces should be used for investment purposes. This is also one of the main reasons why watches are so much more expensive than other jewellery types in terms of price per gram of gold.
If you’re looking for investment jewellery, we usually recommend buying a solid gold chain or bracelet, as these pieces usually require minimal craftsmanship. Gold sovereign coins are also popular as investment pieces, as they do not require any craftsmanship and can be easily melted down.
If you’ve ever wondered “How much is my ring worth?”, then you’re already well on your way to investing in gold jewellery. One of the first steps for buying any investment jewellery is to calculate how much it is worth. From here, you can determine how much you should be paying for the piece in order to make it worthwhile.
Some jewellery stores offer appraisals upon purchase; for example, here at Hatton Jewellers we provide professional appraisals with most jewellery orders. However, in the case that your jeweller does not offer this service, we always recommend getting this completed by a third-party.
Following on from the last point, receiving an appraisal will allow you to insure your investment jewellery. With many experts recommending to keep your jewellery investment for a minimum of 15-20 years, you never know what could happen in this length of time, so it is important to protect your assets. Skipping on insurance is certainly not worth the risk.
Avoid New Diamonds
Did you know that diamonds lose over 50% of their value the second you leave the jewellery store? With this in mind, any new jewellery that contains a diamond is generally a bad investment. Yes, that’s right — if you’re buying an iced out bracelet as an investment piece, then you’ve made a serious mistake.
Buying second hand diamond jewellery, such as engagement rings, can often lead to significant savings. This means that, if you can find the right pre-owned diamond piece, you could benefit from a successful investment; especially with antique or vintage pieces.
Buy Jewellery You Like
Last but certainly not least, we recommend only investing in jewellery that you actually like. It’s not just about the money; part of the fun of jewellery investing is buying fine pieces that you can enjoy wearing. If you’re shopping for something that you like, then you’ll be more patient with the shopping process, and you’re more likely to make smarter purchasing decisions.
For more articles like this, why not check out the Hatton Jewellers blog?