What is an investment?
People make money either by working or by investing their money to get higher returns. People generally invest their time and money with an expectation of getting something higher in return, although investments do not always give good returns as investments generally are risky. Some investments may give good returns while others bad returns. But investments are generally worth the risk as they are key ways through which financial goals can be met- investment is a key to financial security and stability. When thinking of investing, one should check out for red flags. For instance, an area of investment that is not completely understood should be completely avoided. Also, businesses that have no traction of returns on investments shouldn’t be invested in.
It is important to note that investment in this context is not the same as saving, neither is it the same as speculation. Saving is different from investment. Saving is putting money aside for later use, while investment involves purchasing of assets that may increase in value; assets like jewelry. Investment is generally riskier than saving. Also, investment is best for long term goals while saving is best for short term goals. Speculation is a different kind of investment; it involves a higher-than-normal risk to obtain a higher-than-normal return.
Investment in this article refers basically to the act of committing money and then deriving profit from it or from the appreciation of the capital. There are many areas money can be invested in and they include: stock, securities and bonds, mutual funds, real estate, precious stones and metals, cash and commodities e.g. cryptocurrency, gold and precious stones or metals, etc. Before one ventures into any area of investment, one must have an in-depth knowledge of the particular area of investment and also knowledge of how investment works in general.
Investing in jewelries
Jewelries are decorative pieces used for personal embellishment. Precious metals such as gold and silver, and other precious objects such as beads, gemstones, diamonds etc. are normally used in making them. Before we understand whether or not jewelry is a good investment it is necessary to know that jewelries are made from objects, some of which are investable due to their appreciable nature and rarity with time, while others are not. For instance, most gemstones are appreciated.
For jewelry investment to be termed a good investment, it depends on who is investing in the jewelry and what the person hopes to get as a return on his/her investment. For some people, wearing the jewelry they possess provides happiness and confidence. Some people, especially people not in business would see this as a good return on investment. A jewelry given to someone as a gift would be precious to that person and that person would bear it to heart forever- this to some people is a good return on investment.
Some gemstones used in making jewelries are rare and become difficult to find over time. Purchasing jewelries made with such gemstones are good investments as over time people would want to get them at a higher value; some of these gemstones would even be seen as artifacts and would be priced as such. Jewelries containing diamonds also hold appreciating value with time. So, investing in them is a good idea, although diamonds are very expensive and seeing buyers may be very difficult, but once you see a buyer the investment is worth it.
Also, investing in jewelry made by well-known jewelers is a good idea because people, especially luxury loving people, would always go for the ‘designer’ jewelry as made by the designer jewelers. So buying these designer jewelry and keeping them for reselling at higher prices at later years, especially when those jewelry pieces make statements is a good investment idea. Jewelries worn by popular people are treated as artifacts in some instances. In fact, some art collectors around the world focus on collecting jewelry used by popular people and are having good returns on their investments. Antique jewelries are jewelries that can also be invested in. Antique jewelries are jewelry pieces older than 100 years. They always have high sales value, so investing in them would be a good idea. While antique jewelries, vintage jewelries and estate jewelries are all used jewelries their difference should be noted. Antique jewelries are older than vintage jewelries- the former would hold as much value as the latter. Estate jewelries too are not as valuable and are not good investments. Most estate jewelries lose value upon purchase.
One can also look into investing in one-of-a-kind jewelries. Jewelries like that are hard to obtain, but once purchased can be sold back at a much higher price than the purchase amount. Jewelries that are authenticated as rare jewelries too as well as jewelries with natural colors are also investible.
Furthermore, it is important to note that there is no formal structured market for the sale of jewelry; hence there is no price regulation. Hence, resale of the “investible jewelries” is subject to personal business skills like negotiation and careful analytics.
While jewelry may be a good investment, it might also be a bad investment. Most of the investible jewelry mentioned above are almost impossible to obtain. The normal jewelries, which may also be expensive, lose their value once purchased- they even depreciate further with time.
Investing in gold
Gold is a precious stone made into jewelry. Economically, high value is placed on gold such that it is even globally renowned as a store of value- gold serves as a store of value during economic uncertainties. Investing in gold is highly advantageous and the following are reasons why it is a good investment:
- The demand for gold is high and increasing. The demand is higher than the supply.
- Owning gold is a hedge over inflation and deflation.
- Gold is a valuable commodity.
Investing in jewelries may either be a good or bad decision depending on various factors which include:
- What the investor considers as ‘a good investment’. Happiness for the person may be considered good investment.
- What material the jewelry was made from; the rarity and whether it appreciates or not.
- Who the designer of the jewelry is
- Who the previous owner of the jewelry was.
- The age of the jewelry; whether it is estate, vintage or antique.