Business Guides

Diamonds, Gold, And More: Should You Invest In Jewelry?

For those interested in investing, understanding stocks and commodities can be a real challenge, but putting your money into materials like gold can make the investment process concrete. But is gold and other jewelry a good investment? The simple fact is that investing in jewelry isn’t necessarily a better choice than a more classic financial market, but it can be especially secure and offer additional emotional value that stocks or bonds don’t provide.

Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid?

Jewelry
thomasbishara / Pixabay

Basic Material Investing

There’s more than one way to invest in gold, silver, and other precious materials. The simplest way, though, is by purchasing jewelry for milestones and saving family heirlooms, like rings and necklaces that belonged to late relatives. If you’re going to take this road, though, you need to do your homework.

First, when investing in metals, focus on gold and silver, which are more stable in value compared to metals like platinum. To maximize their value, it’s important to understand how to read metal markings. While gold and silver bars and coins are generally 24K (pure) metal, many jewelry pieces are made from mixed metals, and therefore aren’t worth as much. Most jewelry is marked to indicate purity, but a jeweler can also help you select quality pieces.

If you’re going to invest in jewelry with precious gems, you’ll also need to learn to assess those stones, as you do metals. Diamonds, for example, are often replaced with cubic zirconia (CZ) or moissanite, which are of little value. Some pieces are even flint glass. When buying second hand, learning to differentiate between real and fake diamonds is especially important since you may not be able to consult a professional before deciding to buy.

Mastering The Commodities Market

Once you have a better grasp of what materials make sensible investments, making the shift to the metal commodities market COMEX is much simpler because the value of actual materials is closely linked to this market. But how does this translate, practically speaking? It all starts with interpreting the numbers.

Take a look at the early April COMEX numbers on gold and silver, as an example. At that point, gold was leading silver in value, which is what most people expect, but silver was also performing worse than overall trends wound indicate. To understand these value measures, investors need to pay attention to mining trends and metal availability. Typically a combination of demand and availability, as well as regulatory changes, can move futures prices on precious metals.

Some Stock Strategy

Finally, and beyond COMEX, are those stocks that are tied to jewelry and metals. One example: Platinum Group Metals (PPLT). Platinum isn’t often held as a physical investment – only about 3% of platinum is held in physical form, but PPLT is actually a mining company for platinum and palladium, both of which are very high value but which have significant industrial uses. From the automotive industry to medical equipment, companies like PPLT are suppliers, and those who invest in it have to examine trends in consumer markets to determine whether such stocks are going to be profitable.

Investing in jewelry doesn’t need to mean just one thing, but rather can cover the expansive space from purchasing antique rings to investing in mining programs, and it can also be a continuum. The idea for novice investors, though, is to start with what’s familiar, with family heirlooms or special jewelry pieces, and grow from there. Regardless of which approach you choose, the greatest benefit is having a readily available financial backup. From jewelry to stocks, these investments provide security for the future.