Rule #1 – You have to buy “right” which means having built-in profit on the day you buy
You can make money investing in gemstones, but your cost-basis in a given gem has to allow for a built-in profit the day you acquire the gemstone. You need to have a margin of safety, and paying the right price is the single largest determining factor in whether or not you will generate a good return on investment. As with any investment, this requires you to be knowledgeable and exercise a good deal of caution and common sense. You cannot pay retail for a gemstone and expect to sell it for a profit in a few years. Buying low means seeking out wholesale sources. Do your homework. Your best prices come from Primary dealers, like Taranis .Capital; those mine and cut the stones themselves. Secondary dealers buy from other wholesalers, (usually primary dealers,) and resell them, still well below retail. In addition, you will get a better price by purchasing lots than single stones. You can also develop networks of jewelers who wish to sell or otherwise liquidate colored gems they come across. Sometimes you can find gems considerably below current values. You must have the expertise to identify gems, be able to distinguish between natural and synthetic stones, and be prepared to do a lot of legwork.
Here is an example:
As you can see, even a good picture can add value… can you believe this is the same stone pictured above? “The stone marked as a 6.42 carat spinel is not a spinel. It appears it is probably a sapphire. The stone has the correct refractive index for sapphire, is dichroic and the inclusions look like what I see in a lot of sapphires. This one actually has a more blue color looking from the sides, so if it’s a sapphire, it came from a bit of an odd crystal. They are usually blue looking into the c-axis, and green from all other sides. This stone appears to be the opposite of that. The top is not too badly done, though it has some milds polishing streaks and micro chips on some of the facet edges. The bottom could be given a partial recut that would make the stone look a LOT better, with minimal cost or weight loss. Or, it could be completely recut. Using a different design might push more of the blue in from the sides and improve the color slightly. This stone has a nice, deeper tanzanite-like color and color shift to being more purplish under incandescent light. This whole stone could also be recut into a very pretty round with only a slight hint of gray…way better than most.”
Turns out we invested two hours to re-cut only the pavillion… and we increase the value to a gemstone.
Your investment concerns need not be restricted to cut stones. Rough gems, mineral specimens and finished jewelry all hold potential for investment. Each of these is specialized, so you should focus your attention on the one that interests you most.