Investing in Estate Jewelry

August 2013

There are a lot of differing opinions on whether buying antique jewelry as an investment is a good idea. Many people assume if they purchase a jewelry piece made of gold that it will automatically increase in value over time. The same thought process also holds true for diamonds and other quality gemstones.

If you are thinking about investing in estate jewelry, here are some facts which you should seriously consider before making a decision.

Before You Invest

  • Older doesn't always mean better. It's easy to assume if a jewelry piece has been around for a long time it has to be valuable. Unfortunately, that's a false assumption. A piece that is considered "old-fashioned" may generate very little interest in today's estate jewelry market. If the item contains diamonds or other gemstones, much of its value may be determined by the cut of the stones. If it's an outdated cut, only minimal value will be attached to the jewelry piece.
  • Jewelry is subject to market forces. Jewelry is a commodity. This means that the price of metals and gems can fluctuate wildly due to outside factors such as weather events, cultural trends, or political turmoil. The market can also be fickle- a particular gem may become popular because a certain celebrity wears it. Once the "movie star" effect wears off, pieces containing the gemstone may lose their popularity and ultimately their value in the volatile antique jewelry market. It is nearly impossible to predict how these seemingly random occurrences can affect the overall value of a jewelry piece.
  • Loose stones and uncut stones are always risky investments. It is very difficult to put a value on a stone that is uncut. A gem's worth is substantially tied to its color, clarity and cut. Without this vital information, it is extremely hard to arrive at an accurate valuation of stone that is uncut. Insurers tend to shy away from writing policies covering loose stones. The risk of loss is much greater than with an actual jewelry piece. Plus there is an increased risk of fraud with loose and uncut stones.

The Upside of Investing

Most experts agree that there is only one rule of thumb when it comes to investing in estate jewelry: Truly want the jewelry piece and be certain you will enjoy wearing it.

Of course, there are other considerations which you may want to think about when looking for a special item of antique jewelry. Workmanship and design are always important factors when determining the value of a piece. A high-quality gold necklace that is signed by a famous designer will command a much higher price than a similarly made gold necklace whose designer is unknown. Investors can expect to pay a premium price for pieces made by Cartier, Boucheron, Van Cleef & Arpels or other notable jewelry designers.

On a final note, investing in a specific piece of estate jewelry many times involves feelings and emotions as well as cold, hard facts. Antique pieces are sometimes one-of-a-kind and their craftsmanship can be unbelievably intricate and beautiful. Often a particular necklace or pair of earrings may totally capture the heart of the buyer even before the mind starts asking the necessary questions.

Whether buying an estate piece of jewelry as an investment or for purely personal reasons, be certain of the quality and history of a piece. You should always obtain a written appraisal from a licensed, qualified jewelry appraiser before making your purchase.