HOW TO BUY AND INVEST IN GEMS
An investment in gemstones is ideally suited to secure assets in the long term. An investment portfolio can also be supplemented and diversified. However, if you want to buy gemstones in order to speculate on a rising gemstone price and thus achieve capital gains, buying gemstones is less advisable.
THESE REASONS YOU SHOULD BUY GEMSTONES
Buying physical gems protects assets against various risks. For example, rising inflation, a financial crash, or even a currency collapse. The purchase of gemstones is a good choice for this asset protection, as they have proven to be a stable form of investment for centuries. If one day paper money is no longer worth anything, gemstones will still have value. In better times you can sell them again.
Depending on your personal security needs , experts advise buying gemstones with around 10-15 percent of your own wealth. The minimum investment for real investment gems starts at around 15,000 euros. These include gemstones that are hardly suitable as an investment. This price represents the boundary between a gemstone and an investment gemstone. Buying gemstones is therefore not recommended for smaller fortunes.
In addition to wealth protection, you can also benefit from other advantages when you buy gemstones. Unlike gold, there is no state registration requirement when buying a gemstone. Gemstones also do not have to be declared on the income tax return. The purchase of gemstones is generally subject to a VAT rate of 19%. This VAT does not apply in the first step if you decide to store the gemstones in a duty-free warehouse when you buy them. The sales tax rate of the country to which the gemstones are to be delivered then applies to the later delivery.
GEMS AS AN ESCAPE CURRENCY
Precious stones represent the ideal escape currency, as they have an extremely high value density. In an emergency, a small stone with a value of 15-20,000 euros in your trouser pocket can be transported easily and unnoticed across any border and through any airport scanner.
Due to their natural scarcity, gemstones also provide real protection against inflation. That’s why the carat price of investment gems has practically never fallen in the last hundred years.
Since precious stones, in contrast to real estate, do not require any maintenance, they are ideally suited to preserving and securing values for generations.
Gemstones are valued as a safe investment, especially in times of crisis. However, one should not wait until a financial crisis has broken out before buying precious stones. Precisely when there are already the first signs of a crash in the stock or bond markets, galloping inflation develops or the collapse of our currency systems is announced, the price of gemstones rises significantly and it becomes more expensive to buy gemstones. In addition, there could be a veritable run on precious stones, so that further price increases and delivery bottlenecks must be expected.
If you’re looking to invest in gems, it’s best to start investing now. Thanks to this diversification, you are prepared for any crisis and your assets are additionally secured.
WHERE CAN I BUY GEMS?
If you as an investor have decided to buy gemstones, the question arises where real and high-quality investment gemstones can be obtained?
Although there is the possibility of buying gemstones from jewelers as well as on the Internet on various portals, in most cases these are gemstones and not investment gemstones. Especially on the eBay auction portal, only gemstones are offered for sale, even if they are in a higher price segment.
These gemstones are characterized by a much lower quality, rarity and clarity and are therefore offered very cheaply. Colorful glass stones are often offered as gemstones at extremely low prices. Extreme caution is called for with such bargains. Such stones are not suitable as an investment and can usually only be resold, if at all, far below the purchase price.
In general, before buying gemstones, the quality should be checked by a laboratory report. Note the “4 C’s” of gemstones: Clarity, Carat, Cut and Color. Reputable dealers have a laboratory report from an internationally recognized gemological testing laboratory. These would be, for example, those of the German Foundation for Gemstone Research, the DSEF in Idar-Oberstein , the company Gübelin Gem Lab Ltd. in Lucerne (Switzerland) and the SSEF in Basel (Switzerland) .
In addition, the price should always be determined by an appraisal by a court-certified expert for gemstones in Germany. Only these appraisers create valuations that are also recognized by courts or insurance companies.
WHAT GEMS CAN YOU BUY?
Gemstones can be bought cut or uncut. As an investment, however, we only recommend cut gemstones. Why? Because there is a great risk that the gemstone will break or chip while being cut. This drastically reduces the value of the stone. This risk should therefore be borne by the grinder, not the buyer.
In addition, it is advisable to buy either well-known stones such as sapphires , rubies or emeralds , or stones with potential for appreciation, such as tanzanite , aquamarine , peridot and others. Basically, you should look for the highest possible quality.
If you want to buy gemstones, you should also consider storage and packaging in addition to the 4 C’s. It is advisable to buy gemstones only in safety packaging. The gemstone is sealed in a clear plastic blister with a serial number on it, which can then be matched to a laboratory report and appraisal. This is the only way to ensure that you actually received the gemstone listed on the laboratory report and that you do not own an imitation.
Since gemstones are bought anonymously and without reporting requirements (like gold), one has to think about the best and safest storage.
First you should decide whether you want to keep the stones at home or in a safe place such as a safe deposit box.
BEWARE OF A BANK LOCKER
Many people think of a safe deposit box as their first choice for storing gems. But there is something that many are unaware of. The opening of each safe deposit box is reported by the bank to a state central reporting office. In addition, the emergency law allows the state to even open safe deposit boxes in special crisis situations. Here is how these assets can be accessed. The initiation of bankruptcy also leads to the opening of the safe deposit box in the presence of a tax officer. Therefore, if you are planning to store it in a locker, it would be highly advisable to look for a reputable private provider in Germany or to choose a provider abroad, far from the access of the German state.
If you store the gemstones at home, you should definitely clarify with your insurer which requirements are necessary for appropriate insurance cover. A small, very simple safe is usually not enough. Although often ridiculed, gems can simply be buried in the garden. However, since you cannot be found by metal detectors, you should remember very well where you buried your treasure. Gems come from the earth. Therefore, they can easily remain buried in the ground for decades or even centuries without losing their value and beauty.
ADDITIONAL COSTS WHEN PURCHASING A GEMSTONE
The acquisition of high-quality gemstones always involves additional costs. These are primarily incurred for the valuation reports and the laboratory reports . Finally, the storage costs have to be taken into account. Storage at home is much cheaper, but also much more risky than storage in a locker or bank vault.
THINGS TO KNOW ABOUT GEMS
Gemstones have attracted everyone, not just women, for thousands of years because of their beauty. It was men who were the first to adorn themselves with precious stones. Even the ancient Egyptians set precious stones in jewelry. Their splendor and purity represented the grandeur of the early rulers. In India each caste had its own gem assigned to it.
Sapphires, emeralds, rubies and other precious stones – they all have in common that they come from the depths of our earth. They are minerals like many other, less noble rock types, too. The difference lies in the purity of their composition, the symmetrical internal structure that gives them hardness, and various inclusions that add colored brilliance to transparent gems.
A big factor that determines the value of high quality gemstones is their rarity. While around 1,500 tons of gold and around 22 tons of diamonds are mined annually, the production volume of e.g. high-quality rubies at just under 2 kilograms. Per year. This makes gemstones an extremely desirable and, most importantly, undervalued investment that will be enjoyed for generations to come.
