Conscious consumption has also reached the luxury market. Jewelry is bought not only because “it’s beautiful and you want it” - they become an object of investment. Nadya Mendelevich, gemologist, editor of vogue.ru and curator of private jewelry collections, gives advice on how to properly invest in Jewelry.
Let's not lie: the jewelry industry has always developed thanks to the desire of people to demonstrate their own well-being. No matter how wonderful the stone itself may be, the desire to own it is determined not only by its beauty, but also by the price, which emphasizes the status of the owner. What happens to the price of the stone after purchase: does it fall or rise? Is it possible to purchase jewelry without losing money and even making money? Quite. And you don’t have to be on the Forbes list to do this. Let's consider strategies within a budget comparable to the annual salary of a beginning financial analyst -£40k.
Buying jewelry that will hardly lose value
difficulty level:short
budget: from £ 3 thousand to £ 10 thousand
The easiest way is to buy iconic jewelry that everyone wants to own for at least five years. There are several collections of famous brands, jewelry from which will hardly lose value on the secondary market. An ideal example is the Alhambra collection produced by Van Cleef & Arpels. Second and third places are shared by Cartier jewelry in the form of nails and the B.Zero line from Bvlgari. In early spring and late autumn, limited editions are released: if you are lucky, a popular piece of jewelry in a rare version will not drop in value even by 20%, which is quite humane in the treacherous world of jewelers. Some brands actively invest in promotion, defining fashion and creating stable demand for their hits. The wave of popular love is also enough for those jewels of these brands that left their native boutique ten years ago. The main disadvantage of such purchases is no originality.
Just un Clou ring, Cartier. 3050 pounds, on the secondary market in London - from 2200. Buying a simple piece of jewelry that won't lose value
difficulty level:average
budget: from £ 5 thousand up £ 15 thousand
For those who are not accustomed to obeying fashion and live by the principle of less is more, there is a Rapaport table and a scale of color and purity of diamonds. It sounds scary, but in reality it is no more difficult than classifying airline fares. Having understood this, it is worth paying attention to everyday jewelry with diamonds of color F-G (virtually colorless) and clarity VVS2-VS1 or VS2 (inclusions are not visible without a magnifying glass), which can be bought from few famous jewelers who order stones on the exchange and give preference to commercial certificates of the International Gemological Laboratory (IGL). But the GIA certificate, which is the gold standard on the market, is not required: rather than overpay for it, it is better to gain a couple of extra tenths of a carat.
At the upper limit of this level of budget, it makes sense to seek advice from a gemologist (his services cost about£ 500) and find a nice light yellow diamond that has a good chance of going up in price. For the same money, you can hire a different kind of expert - a jewelry historian, who will help you choose a worthy antique piece of jewelry. The higher the collectible value of such a piece of jewelry (an unusual but striking example of fashion from the 1910s will cost more than a classic from the 1850s), the more confidently it behaves as an investment. By the way, an antique jewel worth more than£ 5 thousand, most likely, exists in a single copy.
Earrings with sapphires and diamonds, Giovane workshop. Similar ones will be made to order for you for £7-15 thousand. The final cost is determined by the quality of sapphires Buying unusual jewelry that will increase in value
difficulty level:high
budget: from £ 15 thousand to £ 40 thousand
At the upper end of this budget level, you can find a noticeable (carat weight) yellow diamond. Unlike their colorless counterparts weighing up to five carats, even small colored diamonds increase in price - they can be considered an investment. At this same level, it makes sense to pay attention to colored gemstones. Rubies, sapphires, Colombian emeralds, Australian opals and natural alexandrites of the highest characteristics and weighing from two carats are not just money spent, but also an investment. You can’t do without certificates: GIA, AGL and IGL have priority. If the choice falls on jewelry with a famous hallmark, then first-class colored gemstones are at least a guarantee of maintaining a high value. By contacting a private jeweler, you can get jewelry that will most likely increase in price in the first year. As your budget increases, your chances of purchasing a museum-quality item on the antique market also increase.
At this level, you should be careful with semi-precious stones: the probability of making a mistake in your forecasts is high. Firstly, recently more and more deposits have been discovered in Africa in which gems that were considered very rare and expensive three years ago are mined. Secondly, in demand for semiprecious stones fashion intervenes. The popularity of this gem variety may increase for a couple of seasons due to its fashionable shade. Market prices will rise, but investment potential will remain insignificant.
Diamond and emerald ring created in the 1920s. Estimated value £15-20 thousand, Jewelery Atelier collection In the top photo: an investment diamond weighing more than 50 carats in the Chopard workshops.
Wealthy Russians have always viewed the purchase of jewelry as one of effective ways investing money. This type of investment, of course, is inferior in popularity to purchasing real estate and bank deposits, but the interest in jewelry in Russia is so great that in 2016 it entered the top 10 countries with the greatest demand for gold jewelry. According to Irina Stepanova, executive director of the Sotheby’s representative office in the Russian Federation, in recent years, interest in expensive jewelry and rare diamonds is partly due to turbulence in the economy.
Of course, they invest in jewelry not only in Russia. Along with other luxury items (antique furniture, Chinese ceramics, collectible watches, vintage cars, etc.) jewelry included in the Knight Frank Luxury Index. Over the past year they have risen in price by 4%, over 5 years - by 49%, over 10 years - by 142%. Among Knight Frank's top ten luxury goods, jewelry is second only to classic cars in terms of profitability over a long investment horizon, and.
What is easier to make money on?
Not all jewelry is suitable for investment. Mass-produced products are usually not suitable for these purposes; it only makes sense to invest in products that meet a number of criteria. When buying jewelry, experienced investors follow rules much the same as when buying art. Not all paintings will rise in price in the future, but you can safely invest in works by top artists and universally recognized masterpieces.
Experts say that ordinary jewelry designed for mass buyers is not an investment instrument. The products that fill the windows of chain jewelry stores are sold at a very high markup, not to mention taxation. According to Otkritie Broker analyst Andrey Kochetkov, such jewelry costs 2-3 times more than the precious metal and precious stones from which they are made. After purchase, jewelry immediately loses value, since upon resale it will not be possible to compensate for various markups - they will only look at the cost of the material and artistic value, if any.
Only certain categories of jewelry can increase in price in the future. According to the General Director of the Guild of Russian Jewelers Eduard Utkin, these include:
- Jewelry decorated with large natural stones. It makes sense to invest in them, since stones rise in price much faster than precious metals. Large gemstones are considered to be from 1 carat and semi-precious from 5 carats.
- With the second category everything is more complicated. Only a specialist will be able to assess the complexity of making jewelry and determine the potential for price growth of a product that is of historical value or a piece of modern art.
In any case, such investments involve expenses amounting to hundreds of thousands of rubles. If we are talking about a product of the 21st century, then perhaps it will only be appreciated in 20–30 years. Rarely does anyone manage to make quick money in this field.
According to the president of Singapore Castle Family office, Eldiyar Muratov, investing in jewelry is a privilege for wealthy investors. This is done only by the wealthy public, who are not concerned with immediate benefits, but expect to earn good money in the future. By rich investors, Eldiyar Muratov means people who manage $5 million or more of their own funds.
However, not all experts agree with Eldiyar Muratov. For example, Andrei Kochetkov claims that you can make money on relatively inexpensive products intended for the mass consumer. One of the options involves taking a train to the UAE. In the Emirates, a large assortment of gold jewelry is always on sale, which by weight is only 10–15% more expensive than scrap gold. Such an investment can bring profit quite quickly.
Advantages and disadvantages
It is not without reason that jewelry has been used for many centuries as a tool for savings. Their prices rarely show a sharp rise, but almost never fall. Usually, after purchase, it remains constant for some time, and then gradually increases depending on the dynamics of prices for stones and precious metals, as well as on how interesting the product is to collectors. It is almost impossible to lose money on such investments. Another plus is the high capital intensity of assets. Expensive jewelry solves the problem of concentrating a large amount of money in a small item. A safe the size of a shoebox can store a fortune.
Main disadvantages: low market liquidity, long investment horizon, prohibitively high entry threshold for many. The optimal investment horizon is approximately the same as at 20–30 years. In order to have enough funds to purchase a suitable item at an auction, it is advisable to have $300–400 thousand. The exact amount that may be required is difficult to determine. It happens that bidding starts at $100 thousand, but in the process of competition for the possession of a promising lot, the bar rises to $2 million.
It is very difficult to sell jewelry profitably and quickly, since prices rise slowly, and the associated costs are high: you have to pay a commission to an auction or other intermediary. The purchase also involves serious expenses: you need to pay for the examination and ensure safe transportation. The appraisal of the jewelry will cost at least 35 thousand rubles, the commission to the intermediary will be 0.5–3%.
According to Muratov, you can make money on jewelry within one to two years. The profit in this case does not come from the fact that the jewelry becomes more valuable from a historical point of view (you need to wait 10–20 years for this), but from the rise in price of precious metals and stones, increased demand and the ability to find a buyer. It is rare to succeed in such a business; it requires a certain amount of luck.
One of Singapore Castle's clients recently made good money by reselling a gold ring with a rare blue diamond. He bought this jewelry from a private collector for $2.1 million, and during the bargaining process the price was reduced by 8% from the original. After 4 months, the investor sold the ring at a closed auction for $2.75 million, the profit exceeded $500 thousand.
Nuances of choice
Among the factors influencing the cost of jewelry are: the name of the jeweler, uniqueness, history of ownership, characteristics of the stones and time of manufacture. The quality of the product, of course, must be at its best. The cost of decoration largely determines gem. When purchasing, an investor should pay close attention to its uniqueness and quality.
Irina Stepanova claims that there is now a good demand for colored diamonds, emeralds, sapphires and rubies. Also recently, non-precious stones have become more expensive: beryl, aquamarine, turquoise and tourmaline. The dynamics of them can be traced differently, but some stones seriously increase in price. For example, 15 years ago a carat of aquamarine cost $15, but now it costs about $300.
According to Muratov, if an investor wants to make money on the rising price of a precious stone, then it may make sense to order jewelry from professionals. This is not difficult to do: you need to buy a stone without a setting and find a jeweler whose work is in demand on the market. An exclusive product will be easier to sell for good price. The cost of work will be 2-3 times less than if you buy a similar decoration in a store. Savings will be achieved due to the absence of an intermediary and logistics costs. The total cost of stone, precious metal and work is always less than finished product in the shop.
Another important nuance- origin of the product. Usually the jewelry worn famous personalities, rise in price faster, and there is greater interest in them from collectors. You can get information about the history of jewelry from jewelers. Jewelry houses usually keep archives; it is often possible to find the customer by the registration number of the product.
As for jewelry houses, Buccellati, Bulgari, Cartier, Chopard, Harry Winston, Graff, Mikimoto, Piaget, Tiffany & Co and Van Cleef & Arpels are now popular. However, not all products of these companies become more expensive every year. Appreciated exclusive jewelry, and the cost of mass products does not change much over time.
Experts recommend not letting the work of individual masters, known for their unique works, out of sight. In recent years, jewelry market Jewelry from Georges Braque, Peter Chang, Coco Chanel, Andrew Grima and Suzanne Belperron are highly regarded.
In addition to the creations of recognized masters, the products of young jewelers are very promising. In particular, experts recommend investing in young Russian brands. So far their cost is underestimated, since wide popularity has not yet come, but the quality of work and artistic design are sometimes at a very high level. Such jewelry is clearly undervalued and will become much more expensive in 5-7 years. As examples of promising companies, Eduard Utkin cites participants in the international jewelry exhibition that was recently held in London. These are "Russian Gems" jewelry houses: Ringo, Argentov, Kabarovsky, Chamovsky, Echo, Treasure House and Aldzen.
Jewelry that became widely known during certain historical periods can also become significantly more expensive: for example, in 1900–1920. or in the 1950s. Such jewelry is constantly increasing in price because it has cultural and historical value and is in demand by wealthy collectors. According to Knight Frank, in the last decade, antique jewelry has risen in price by 63%, products created in 1945-1975. - by 73%, products of the Belle Epoque (1971-1914) - by 93%.
When selling jewelry, collectors are in a more advantageous position. For example, if there are several Van Cleef brooches from a rare series, then such a collection can be sold for more than all the items individually. It makes sense to collect not only the creations of one author, but also jewelry of one era. By selling all the jewelry from one historical period at once, you will probably earn more. But the search for a buyer may take a long time.
Purchasing mass-produced jewelry that is sold online jewelry stores, cannot be considered an investment instrument, experts say. “On jewelry for consumer consumption in Russia, there is a very large markup by sellers, not to mention taxes. Such jewelry is two to three times more expensive than the metals and precious stones that are used in them,” explains Otkritie Broker analyst Andrey Kochetkov. After purchase, they immediately lose part of the price, which is associated with various markups and production costs, since they can most often be sold based only on the price of the precious metal.
Only certain categories of jewelry may increase in price in the future. “Firstly, these are products with large natural stones, since the cost of stones is growing much faster than the cost of precious metals,” says Eduard Utkin, general director of the Russian Jewelers Guild association. Stones weighing more than one carat are considered large on the market among precious stones, and among semi-precious ones - from about five carats, the expert clarifies.
The second category is jewelry that is complex in execution and artistic design, which have cultural or historical value, are works of art or antiques. According to Utkin, the cost of products in both cases starts from several hundred thousand rubles, and the value of a unique product can only be fully appreciated after 20-30 years.
Investing in jewelry is a matter for wealthy investors, says Eldiyar Muratov, president of the Singapore Castle Family office. “Investments in jewelry houses are only available to the wealthy and are aimed at preserving capital and achieving significant price increases in the future,” he says. By wealthy we mean the public with assets of $5 million or more, the expert clarifies.
However, not the richest investors can bypass the restrictions and make money on jewelry, experts interviewed by RBC are sure. For example, says Andrey Kochetkov, you can try to find jewelry with a lower markup. “If you have the opportunity to visit a country like the UAE, then you can buy gold jewelry from local jewelers at a 10-15% premium over the price of gold on the exchange. It is quite obvious that such a purchase can justify itself in a shorter period of time,” he notes.
Advantages and disadvantages
There are benefits to investing in jewelry. Purchase price in in this case not volatile and unlikely to fall. “It will remain constant for some time, and then gradually begin to increase depending on the increase in the cost of stones and metal and the increase in demand from collectors. It’s almost impossible to make a loss here,” says Anna Kokoreva, deputy director of the analytical department at Alpari. In addition, the advantages include the high capital intensity of assets. “Precious items allow you to concentrate a huge amount of money in one small object. Due to their small size and weight, there are no problems with storing them,” says Eldiyar Muratov.
The main disadvantages of investing in jewelry are low market liquidity, a long investment period and a high entry threshold. As in the case of buying paintings, the investment horizon for jewelry is usually 20-30 years, and the cost of jewelry at auctions usually does not fall below $300-400 thousand. “It is difficult to determine the lower entry threshold. At auctions, jewelry can be sold starting from $100 thousand, but during the auction the cost can rise to $2 million,” explains Muratov.
It is also unlikely that such investments will be realized immediately, especially since this process requires special expertise, adds Anna Kokoreva. “To buy a valuable piece of jewelry, you need to spend money on expertise and safe transportation, and to sell it, you need to pay a commission to an auction or other intermediary, and also find a buyer,” she says. The cost of services will depend on the complexity of the examination and transportation. The minimum cost for assessing jewelry, according to the expert, starts from 35 thousand rubles. and higher. The commission to the intermediary can be 0.5-3%.
You can earn money by buying jewelry in the short term (one or two years), however, the income in this case will depend not on the increase in the historical value of the product, as in the future 10-20 years, but on changes in prices for precious metals and stones, competition among contractors and, most importantly, the level of demand for a particular product and the ability to find the right buyer, explains Muratov. Such cases are rare, but they do occur. “An example would be a transaction from one of our clients. An investor purchased a gold ring with a very rare blue diamond for $2.1 million from a private collector (with an 8% discount), and then four months after the purchase put it up for sale at a closed auction and sold it for $2.75 million, earning thus $650 thousand,” says Muratov.
How to choose
The cost of jewelry is influenced by several factors: the name of the jeweler, provenance (history of ownership), uniqueness, characteristics of the stones and the period of manufacture, says Irina Stepanova. “Also, of course, the quality and safety of the product and confirmation of the authenticity of origin are important,” adds Anna Kuchera.
The gemstone greatly influences the cost of jewelry. It is better for an investor to purchase products with rare and high-quality stones, experts advise. According to Irina Stepanova, now the most expensive and in demand are colored diamonds and precious stones such as sapphires, rubies and emeralds. Among diamonds, according to the Fancy Color Research Foundation (FCRF), blue diamonds showed the highest returns over 12 months - their average cost increased by 5.5%. According to Eduard Utkin, in recent years, non-precious stones, such as aquamarines, beryls, tourmalines and turquoise, have also become more expensive. “The price for each stone is different, but, for example, an aquamarine stone 15 years ago cost about $15 per carat, but today they give about $300 for 1 carat of this stone,” he gives an example.
By the way, if an investor wants to focus specifically on a precious stone, then creating custom jewelry can be profitable. To do this, you can purchase an unframed gemstone and find a professional jeweler who will make a masterpiece out of it, says Eldiyar Muratov. “Such a product may turn out to be “one-piece” and have no analogues, which will increase its value. The cost of manufacturing the product in this case will be two to three times less than when purchasing an analogue in jewelry stores. Savings will occur due to a reduction in distributor and brand markups, logistics costs and due to a minimum markup on the purchase of stone and scrap,” the expert notes.
Another point worth paying attention to is the origin of the product. As a rule, decorations with interesting biography rise in price faster than others. In addition, the likelihood of finding a buyer for them among collectors is higher. You can find out the history of jewelry in the jewelry houses themselves and from jewelers, if they keep archives with registration numbers of products and names of customers.
Among the famous jewelry houses, experts name Harry Winston, Buccellati, Van Cleef & Arpels, Graff, Tiffany & Co, Piaget, Cartier, Chopard, Bulgari and Mikimoto. However, experts warn that belonging to a large jewelry house does not guarantee that the price of jewelry will increase. If this is not an exclusive decoration, but a mass product, then, despite famous brand, its price most likely will not change significantly.
Experts advise taking a closer look at the works of individual craftsmen who have created and are still creating unique pieces of jewelry. Thus, among the high-profile acquisitions of recent years in the jewelry market, Knight Frank experts name the sale of jewelry by such authors as Suzanne Belperron, Andrew Grima, Georges Braque, Coco Chanel and Peter Chang.
In addition to recognized masters, you can also pay attention to the products of young, as yet unknown jewelers and jewelry companies, advises Eduard Utkin. “Now it is profitable to invest in our young national brands. The cost of their jewelry is still underestimated, since there is no premium for brand fame, while the quality of workmanship and artistic design are at a high level,” the expert notes. Such jewelry, according to the expert, is obviously undervalued and will rise in price within five to seven years. Among young and promising Russian companies, Utkin names, for example, eight companies that took part in the London jewelry exhibition in September 2017: these are the jewelry houses ArgentoV, Ringo, Russian Gems, Chamovsky, Kabarovsky, Treasure House, Echo and Alzena .
An increase in value can also be expected from jewelry associated with certain historical periods - these are products created in the 1900-1920s, as well as in the 1950s, says David Warren, director of Christie's jewelry department in London. According to him , the cost of such jewelry is constantly growing, as they have historical and cultural value and are in demand by collectors. According to Knight Frank, over the past ten years the cost of antique jewelry has increased (by 63%), products created between 1945 and 1975 (. by 73%), as well as Belle Époque jewelry symbol period of European history between the last decades of the 19th century and 1914, by 93%).
Creating a jewelry collection can also have a positive effect on the price. “If you are lucky enough to collect a collection of Patek Philippe watches or Van Cleef brooches from a rare series, this increases its value and demand,” Irina Stepanova gives an example. You can collect not only works by one author, but also products from the same era. “If you combine pieces from the same historical period, when you decide to sell the collection, the pieces will likely be worth more than if you sold them individually,” concludes David Warren. According to him, this is a profitable tactic, however, it is almost impossible to predict with certainty whether the collection will increase in price and by how much.
You should only purchase exclusive jewelry from reliable sellers or directly from well-known jewelers. “Then this product will be accompanied by the necessary certificate of conformity and reputation. In other cases, there is no guarantee that this product is not a replica of the original or even a fake,” warns Andrey Kochetkov. You can monetize the increase in the price of jewelry by selling it privately or through various auctions.
Exhibitions per year.
The largest of them is considered to be the meeting in Hong Kong. It attracts about 4,000 participants. They are representatives of almost 50 states. What attracts jewelry manufacturers and connoisseurs jewelry exhibition what kind of phenomenon is this? It's worth looking into.
Jewelry exhibition – what is it?
If we go into terminology, then jewelry exhibition- museum event. It only involves showing jewelry and getting to know their history. There is no opportunity to buy, learn about market trends, meet with its intermediaries, or take advantage of additional services in the jewelry industry.
All this can be done on jewelry exhibition. The event is industry-specific, that is, it brings together all industry entities on one platform. These include producers, intermediaries and consumers. You can watch, buy, and search business partners, and find out a list of new products, production, and services.
The need for trade and industrial exhibitions appeared with the advent of the era of mass consumption. Citizens do not have time to keep track of all the abundance of goods and services.
Instead of putting together disparate information and searching for it on their own, consumers come to industry meetings. Everything, as they say, in one place.
In order to focus attention on the main focus of the exhibition, they add to this word: - sale, trade and industrial, fair. Such formulations are acceptable, but jewelry exhibition 2014– a term that does not reflect the entire essence of the event.
World-famous jewelry exhibitions
All aspects of jewelry are represented by Inter Jeweler. The exhibition includes equipment, components, and, of course, finished jewelry. To get acquainted with them, about 40,000 arrive annually. The international meeting traditionally takes place in the city of Sochi. Inter Jeweler started in 19994.
Jewelry exhibition in Moscow deserves special attention, if it's "Junwex". The meeting is held by the Restex-Junvex complex, which has been organizing gatherings for more than 20 years.
The organization has organized 7 Russian exhibitions. The largest one takes place in the capital in December. There are about a thousand participating companies on it. The number of products presented exceeds 500 million copies.
Held jewelry exhibition at the All-Russian Exhibition Center. This is the name of the exhibition complex in the North-East of Moscow. The query " jewelry exhibition at VDNKh" This is the popular name for the All-Russian Exhibition Center area.
Before the Moscow one, preliminary meetings are held, for example, Juntex jewelry exhibition in Yekaterinburg or St. Petersburg. All jewelry companies are represented at Junwex. Jewelry from their main collections is sold at no extra charge, at the factory price. This attracts both wholesale and retail customers.
Outside, the American exhibitions "JA New York Summer Show", "International Jewelry Fair/General Merchandise Show" and "AGTA GemFair Tucson" are thundering. The first is held in summer, the second in spring, and the third in winter.
Specialization of meetings in the USA - . America is their main consumer on the planet. On average, 14-15 billion dollars worth of products are purchased in the states per year.
The world's largest exhibition in Hong Kong was mentioned. Officially the event is called “Hong Kong International Jewely Manufacturers Show”. In addition, they represent premium watches, parts for the production of jewelry, stones, equipment and even packaging materials. Will take place jewelry exhibition in October or November.
A large-scale exhibition specialized in takes place in. BaselWorld is a landmark of the city of Basel. In addition, they like to bring exclusive ones to it.
You won't find any junk goods at the meeting. The same can be said about the Vicenzaoro Choice event. This is Italian jewelry exhibition. September, January and June are the months when it is held.
How are jewelry exhibitions distributed globally?
The distribution of exhibitions and the transition of the palm among them is influenced by the economic situation in the world. Some parts of it are in a state of economic crisis.
In this case, producers from disadvantaged countries rush to export, exporting products that are not in demand at home to currently economically stable countries. Jewelry exhibitions, of course, help promote products. First of all, foreign manufacturers strive to get into them.
Affects distribution jewelry exhibitions and own production and production within a specific country. Regions rich in deposits of stones and metals are naturally actively engaged in manufacturing and holding exhibitions. In areas where there is a lack of raw materials, production suffers and, of course, exhibitions are rarely held and are not large-scale.