Thinking about investing in gems?
In these helpful videos, Skyjems’ David Saad sheds some light on the benefits and risks, what to expect, and how to get started.
Continue reading this summary, or scroll to the bottom to go straight to the videos!
David begins by explaining that while he does have over 20 years’ experience in the gemstone industry, it is always best to consult with a professional financial advisor to ensure that you’re putting together an individual investment plan that is right for you.
He also stresses the importance of understanding that we don’t invest in gems instead of something else, such as real estate or stocks. Rather, we invest in gems as well as or in addition to these other types of investments as a way of diversifying a well-rounded portfolio.
He suggests that gems should be, at maximum, 20% of an investment portfolio, though 10% is a very good number.
“It is a young person’s investment,” David says as he explains that a minimum investment term would typically fall somewhere in the 15 to 20 year range before reselling the gemstones. To see a return on investment, “it’s something you need a long time frame on.”
In the videos, he outlines the benefits of investing in gems, including portability and value.
“They’re the most compact physical form of wealth on the planet,” David says.
A small handful of gemstones worth a small fortune can fit comfortably in your pocket, can travel with you anywhere, and will retain their market value almost anywhere you go.
“Gems are understood to be valuable in every country I know of in the world,” he says, adding that gemstones have always held value throughout history, and while that value can fluctuate over time, it never goes down to zero the way some other types of investments might.
Of course, every type of investment does incur a certain level of risk and David stresses the importance of understanding that “the liquidity of gems is not great.”
Unlike gold, which has an internationally recognized market price and can easily be bought or sold even at a bank, gems do not have a marketplace like this and this is why it’s important to have a third party involved to help you sell your gems, or to help ensure that the gems you are purchasing are indeed genuine. Ideally, this third party would be a gem dealer, a gem broker, or an auction house.
It’s much like real estate, David explains. You can certainly buy or sell property on your own, but it will be a lot of work on your part, will take some time, and you may not get the best deal. A real estate agent can take on the workload, use the various tools at their disposal to reduce the time it takes, and get you the best price for your property.
When it comes to which gemstones make the best investments, David says this is the question he is most commonly asked, and can be the trickiest to answer.
“You do not want to go too heavily into any one gem,” he explains. “You need to diversify your (gem) investment.”
Overall, the best gems to invest in tend to be rubies, emeralds, and sapphires, though emeralds and sapphires do tend to have more demand and liquidity than rubies.
Zambian emeralds in particular, he says, currently offer incredible quality and great value. With these stones, David predicts, “you’re going to see very good increases in value on a 5 to 10 year timeline.”
Ethiopian sapphires are another great choice, according to David. There are newly rediscovered mines in the East African country that are producing “big, beautiful, unheated stones,” he says.
While considering the liquidity (or sellability) of an investment gem, it’s also important to remember that “all gems are a finite resource by default,” as David says, which is part of what determines their value. Some gems are especially finite, such as the fanta garnet.
“It’s beautiful and amazing and I personally love it,” David says, “but there’s a little bit of risk involved with that because if the supply of the fanta garnet doesn’t continue and it just dies out, it will be very expensive, but not terribly liquid.”
In a situation like this, collectors might pay a fortune for the gemstone in 20 years, but you would need to wait longer to sell the piece.
Another investment stone on David’s radar is ametrine, an incredibly rare, single-source gem.
“I really do feel that ametrine is underpriced on the market,” he says. “It’s the most undervalued gem there is, but I would never tell anybody to put more than 5 to 10% of their total gem investment into ametrine.”
For more on investing in gemstones, check out the videos below and reach out to David if you have any questions about getting started or expanding your existing gemstone portfolio!