Colored Gemstone As Investment Hedge in 2023
Shiraz JewelryShare
- Bleak economy view in 2023 may pushes individuals to look at gemstones as alternative store of value.
- Ruby, sapphires, and emeralds are three most valuable colored gemstones in the world.
- Compared to other tangible assets like real estate or precious metals, gemstones are highly portable and can be easily transported and stored.
- Unlike many other luxury goods, such as fine art or vintage cars, gems are highly durable and can last for generations with proper care.
The Asian Financial Crisis of 1998 was triggered by a complex web of factors, including a significant accumulation of debt. Similarly, the Global Financial Crisis of 2009 resulted in the loss of substantial amounts of money for countless individuals who had invested in financial institutions. More recently, in 2022, the FTX Exchange, a prominent centralized cryptocurrency exchange, suffered a catastrophic crash due to mismanagement of funds. And now in March 2023, we are witnessing the collapse of Silicon Valley Bank. However, I will not delve into these collapses, as they are not my area of expertise. Instead, I will focus on a topic that I am well-versed in: gemstones.
Many individuals seek assets that offer both stability and potential for growth. While traditional investments like stocks and bonds can certainly offer these benefits, some investors may also consider alternative investments like gemstones. Gemstones, particularly colored gemstones like rubies, sapphires, and emeralds, can offer several advantages as an investment option, including the ability to hedge against risk.
Are gems a good investment?
While investment decisions are highly subjective and dependent on individual circumstances, there are several reasons why colored gemstones like ruby, sapphire, and emeralds may be considered a good option for investment during a financial crisis in 2023:
- Store of Value: Historically, precious gemstones have served as a store of value during times of economic uncertainty. This is because gemstones are tangible assets with intrinsic value, which means that their worth is not tied to the performance of financial markets or other external factors. In times of economic distress, investors often seek out tangible assets like gemstones that can retain their value and provide a sense of security.
- Rarity: High-quality colored gemstones like rubies, sapphires, and emeralds are rare and difficult to find, which means that their value tends to appreciate over time. Unlike other types of investments like stocks or real estate, which can be easily replicated or replaced, each gemstone is unique and has its own distinct characteristics that contribute to its value.
- Demand: Despite economic fluctuations, there is always a demand for high-quality colored gemstones. These gems are highly sought after by collectors, investors, and consumers who appreciate their beauty and rarity. In addition, as the global economy continues to grow and more people gain wealth, demand for luxury goods like gemstones is likely to increase, further driving up their value.
- Portability: Compared to other tangible assets like real estate or precious metals, gemstones are highly portable and can be easily transported and stored. This makes them a convenient and flexible investment option for those who need to move assets around or diversify their portfolios.
Related:
But why are gems worth so much?
Many gemstones are rare and difficult to find, which makes them highly sought after by collectors and investors. For example, certain types of diamonds, such as pink or blue diamonds, are extremely rare and can fetch millions of dollars at auction.
Unlike many other luxury goods, such as fine art or vintage cars, gems are highly durable and can last for generations with proper care. This means that they can be passed down as heirlooms and continue to retain their value over time.
Where to get gem quality gemstones?
Country like India is one of the largest producers of diamonds, as well as other gemstones like emeralds, rubies, and sapphires. Sri Lanka is known for its high-quality sapphires, particularly its famous cornflower-blue sapphires. Colombia is the world's largest producer of emeralds and is known for producing some of the finest emeralds in the world. And Brazil is a major producer of a wide variety of gemstones, including tourmaline, aquamarine, and amethyst. Australia produces sapphires. While Thailand is known for its high-quality rubies, sapphires, and spinels. Thailand is a popular destination for gemstone buyers.
There is no single country that is the best place to buy gemstones as it really depends on the type of gemstone you're interested in purchasing. But if you want to look at different variety of gemstones in one place, you may consider visiting Bangkok, Thailand.
Bangkok: Global center for colored gemstones
Bangkok, Thailand has become a global center for colored gemstones due to a combination of factors, including the country's rich history and culture of gemstone mining and trading, its strategic location in Southeast Asia, and the presence of skilled artisans and expert gemstone cutters.
Thailand has a long history of gemstone mining and trading, dating back over 700 years to the ancient kingdom of Ayutthaya. Today, the country is one of the largest producers and exporters of colored gemstones in the world, including rubies, sapphires, and emeralds, as well as lesser-known gems like spinel and garnet.
In addition to its mining and trading heritage, Bangkok's strategic location in Southeast Asia has also played a key role in its rise as a gemstone hub. The city serves as a gateway to other major gemstone markets in the region, including India and China, and is easily accessible to buyers and sellers from around the world.
Finally, Bangkok's skilled artisans and expert gemstone cutters have helped to cement the city's reputation as a global center for colored gemstones. Many of these artisans have been trained in the traditional Thai style of gem cutting, which emphasizes precision and attention to detail, and are known for their ability to bring out the unique beauty and character of each gemstone they work with.
All of these factors have contributed to Bangkok's emergence as a global hub for colored gemstones, attracting buyers and sellers from around the world who come to the city to purchase and trade some of the most beautiful and valuable gems on the market.
Investment risks
It's important to note that like any investment, there are risks associated with investing in colored gemstones, including fluctuations in demand, fluctuating prices, and the potential for fraud. As with any investment decision, it's important to do your research, consult with a gems dealer you trust, and make a decision based on your individual circumstances and risk tolerance.
Generally, the risks are centered around the supply and demand of gemstones which can cause the value of your investment to fluctuate. If you are a beginner, there is a risk of buying fake or synthetic gemstone. Do your research on the gemstone you want to buy, and contact your trusted gemstone dealers for opinions. Gemstones are not a liquid asset, which means they are not easily converted into cash. It may take time to find a buyer, and the value of the gemstones may decrease if you need to sell quickly.
Good luck and hope you find this article useful. Remember, you can always ask us questions around gemstones, their quality, and their value.
|
List of some gemstones based on color: Blue Gemstones: blue sapphire, aquamarine, blue zircon, blue topaz |