For most people, jewelry is a gift, a family heirloom, or a sentimental piece they would never sell – few think about it as an investment. And it’s true: when it comes to finances, most things are only worth what you can persuade someone else to buy them for.
So is jewelry a sound investment? Does it retain its value over the long term, or is it more like a car – as soon as you take a new ring from the jewelry store, does it immediately depreciate in value? Let’s take a closer look at jewelry as an investment and find out the real story.
When Jewelry Is Not a Sound “Investment”
Let’s make one thing clear: there is a difference between a sound “purchase” and a sound “investment.” Most people don’t really invest in cars unless they’re collectors; everyone else is making a purchase because they want to get from A to B. They’re not looking to add value to their car over the long-term…they just want the car to perform its function.
Under which category does most jewelry fall? Truth be told, it’s most likely somewhere in between. A purchase of an engagement ring does indeed sound like an investment because it’s full of items like gold or silver and diamonds. But are you really investing in it, or making a purchase designed for a completely different purpose? There’s a reason that some engagement rings don’t maintain their resale value: people tend to want new ones when they buy one of their own, because they want their ring to be associated with their own romantic story.
Custom-made items should not be considered sound investments for this reason; what’s sentimentally valuable to you might not be quite as valuable to someone else. Yes, jewelry does retain a lot of its value simply because it’s jewelry…but if you’re buying the jewelry expressly for this purpose, you might want to consider other investments first.
When Jewelry Is a Sound Investment
This isn’t to say that jewelry is never a sound investment. In fact, there are plenty of items within a jeweler’s purview that you could consider a sound investment, including:
- Gold and silver coins. Many jewelers sell these as part of their business – but not always. Best to call and find out with your local jeweler first.
- Items containing precious metals, particularly items that can be quickly melted down, might be considered investments. There is always a demand for gold, silver, and platinum…and if you have a piece of pure quality that can be quickly sold, then you’ll likely find that these pieces can serve like investments. Many investors buy physical gold and silver to diversify their portfolio.
Don’t always think of jewelry as an investment, unless the return on your investment is entirely different than the return on investment you’d expect from your retirement account. Jewelry is about style, about romance, and much more – and these concerns often vary in value from person to person.
Does jewelry retain its value over the long-term? You’ll likely find that it varies from piece to piece. You can sell something of universal appeal quickly…but a custom-made piece might not appeal to someone else. Consider an investment in jewelry not necessarily as an investment in your portfolio, but an investment in the richness of your life.