Beyond just looking pretty, diamonds and gold can add value to your jewelry box. In fact, some jewelry collectors purely base their gold and diamonds purchases based on the investment value alone.
While we think you should always love, and want to wear, the pieces that you add to your jewelry collection, we can’t deny that diamonds and gold do make a good investment. Here’s how.
Is Gold a Good Investment?
Investing in gold may sound a little old-fashioned — after all, who keeps gold bricks in their bank vault anymore? — but investing in gold has reached the modern age. Now, you can choose to buy those physical gold products, but you can also invest in gold-related ETFs, purchasing stock in gold-mining companies and related organizations. So why would you want to do this?
While gold no longer backs any international currencies on a formal basis, gold is still valuable to both investors and banks alike. Gold holds its value in a way that paper currency just can’t. If you buy one ounce of gold for a set amount of money, then wait 10 years, you’ll find the ounce of gold has risen in value, while that cash you paid for the gold is worth less, due to inflation. Gold has historically been reliable as an investment that rises in value and that’s valuable even during political or world turmoil. If you’re looking to diversify your investments and you want an investment that’s safe from inflation and other issues, gold is a desirable choice.
Additionally, if you invest in gold-related ETFs and purchase gold stocks, you’ll often not only enjoy the benefits of owning those stocks long-term, whenever you sell them, but you’ll also often receive dividend payments and high gains that make for additional value.
Is Now the Right Time to Invest in Gold?
If you know even the bare basics about investing, then you’ve heard the terms “buy low, sell high” or “buy the dip” — or, essentially, make your investment when it’s cheap to do so, and then sell when your investment is worth a much larger amount of money. So, if the prices of gold are down, that doesn’t mean that it’s a losing game; instead, it means there’s an opportunity there for you to make an investment at a more affordable price, increasing your long-term gains.
So is right now the best time to invest in gold? As of late 2021, experts felt that was definitely the case, even despite gold’s underperformance over 2021. A U.S. News & World Report article found that, in late 2021, even though gold’s per-ounce price was down 5% at the time, it was still at a historical high overall, when looking at past years.
The takeaway? Even if gold seems to be in a downswing at any given time, if you’re not looking to make a short-term investment and are fine with sitting on your gold investment for a while, you can still rely on gold as a safe, smart choice. This is especially the case when considering current inflation rates, as well as gold demand from foreign markets.
Are Diamonds a Good Investment?
So, what about diamonds? While not historically as popular an investment choice as gold, diamonds are still worth considering as an investment.
You can invest in diamonds either as loose, individual diamonds or as diamond jewelry. Both options will increase in value over time, but it is worth noting that diamond jewelry does come with a higher markup than individual diamonds. As designers and jewelers need to claim their cut, you might find that the worth of the diamond itself is hidden beneath the value of the piece as a whole.
While this might not worry you, especially if you intend to resell your diamond jewelry, intact, versus selling the diamond on its own, it is just something to keep in mind while shopping.
There are several reasons why diamonds are a popular pick for many investors. Unlike the stock market, which fluctuates heavily, diamonds typically, long-term, only increase in value, making them a safe investment despite economic or political worries.
Additionally, diamonds’ portability makes them an exceptionally good choice if you’re worried about leaving your investments in one place or not being able to take your investments with you in the event of an emergency. Compared to investments like real estate or even gold, diamonds are incredibly easy to transport; you can keep them in your home safe and then take them with you, wherever you go.
Looking to the future, it’s expected the value of diamonds will only increase, especially as the number of real diamonds in the world decreases. Diamonds are becoming more and more rare as more diamond mines close, depleted, and no new diamond supplies are found. Still, diamond demand continues to increase, even as the number of diamonds available in the world stagnates or decreases, leading to increased value.
However, experts will tell you that some diamonds are a better investment than others. In an expert interview at Lucerne University of Applied Sciences and Arts, a diamond trader told the staff that “investment diamonds” are typically, “quite high grade, they have a good color and they are very rare.” Generally, he noted, investment diamonds are anything weighing 10 carats or more. He also mentioned the value of colored diamonds, especially rare, fancy-color diamonds, which can bring high prices at auction.
Is Gold or Diamonds a Better Investment?
If you’re choosing between investing in gold or diamonds, which option should you go with? It just depends on your preference.
While gold is easier to invest in, at least for a beginner, in terms of finding the right investment (because remember, not all diamonds are a good investment and, likewise, not all diamond jewelry is a good investment), diamonds are more portable. Both options come with their pros and cons.
Let a Yamron Expert Help
Whether you’re just searching for a new piece of gold or diamond jewelry to add to your collection, or you’re looking for an investment-worthy piece, the experts at Yamron can help. Stop in to speak with us today at our Naples showroom or give us a call at 239 592 7707. We can also be reached via email, at [email protected]
Does It Still Pay to Invest in Gold? (Investopedia)
Should You Invest in Gold (U.S. News & World Report)
Is Diamond a Good Investment in 2022? (World Financial Review)