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BUYING GEMSTONES SECURELY AND EASILY

HOW TO BUY GEMSTONES AND INVEST IN THEM

An investment in gemstones is extremely well suited for securing wealth on a long-term basis. Similarly, an investment portfolio can be supplemented and diversified. If you would like to buy gemstones as a way to speculate on rising gemstone prices, and thus make a profit on sale proceeds, then buying gemstones is less suitable.

YOU SHOULD BUY GEMSTONES FOR THESE REASONS

By buying physical gemstones you are securing your wealth against certain risks. For example rising inflation, a financial crash, or even the collapse of a currency. For the purpose of securing the value of your wealth, buying gemstones is a great choice, because they have proven themselves for centuries as an investment form that preserves wealth. If paper currency turns out to be worthless one day, gemstones will still hold their value. In better times you can sell them again.

Experts recommend, depending on your personal security needs, investing approximately 10-15 percent of your assets in gemstones. The minimum investment for genuine investment gemstones begins around approximately 15,000 euros.

Below this level you would find jewels, which are ill-suited as an investment asset. This price represents the line between a gemstone and an investment gemstone. Buying gemstones is therefore not recommended for those with modest wealth.

Buy gemstones without reporting requirements

In addition to securing your wealth, you also profit from other advantages when you buy gemstones. Unlike with gold, there is no reporting requirement for purchases of gemstones. Gemstones do not have to be disclosed on an income tax return, either. The purchase of gemstones is subject to VAT at the rate of 19%. 

No VAT is payable initially if you elect at the time of purchase to have your gemstones stored in a duty-free warehouse. If the gemstones are delivered to the owner later, then VAT is owed at the rate of the country in which the gemstones are to be delivered.

GEMSTONES AS A SAFE-HAVEN CURRENCY

Gemstones are an ideal safe-haven currency because they offer an extremely high concentration of value. In an emergency a small stone with a value of 15-20,000 euros can easily be transported over any border and through every airport scanner, escaping notice in a pants pocket.

Due to their natural rarity, gemstones also provide genuine inflation protection. For this reason the carat price of investment gemstones has virtually never fallen over the last hundred years.

Because gemstones, unlike real estate, require no maintenance, they are optimally suited to retain and secure wealth across generations.

Gemstones are valued as a safe investment, particularly in times of crisis. Buying gemstones should not be delayed until a financial crisis has arrived, however.

 Especially when there are initial signs of a crash in the stock or bond markets, when inflation starts to fly, or when the collapse of a currency system is imminent, there will be increased prices for gemstones, and it will thus be more expensive to buy gemstones. Furthermore, a run on gemstones can develop, such that further price increases and delivery bottlenecks can be expected.

If you would like to invest in gemstones, you should get started right away. With this diversification you are prepared for any crisis and your wealth is secured accordingly.

WHERE CAN I BUY GEMSTONES?

If you have decided, as an investor, to purchase gemstones, then the question arises: where can you buy genuine, high-quality, high-value investment gemstones?

There is the possibility of buying gemstones through jewelers and through various portals on the internet, however in most cases you would only be buying jewels and not investment gemstones. In particular, on the auction site eBay you can only buy jewels, even if they are found in a higher price segment.

These jewels are characterized by far lower quality, rarity, and clarity, and therefore are offered for very low prices. In addition, colorful glass stones are often offered as jewels at extremely low prices. With such low prices, extreme caution is warranted. These stones are not suitable as investments and can generally only be sold far below their purchase price, if at all.

As a rule, the quality of gemstones should be verified with a lab report prior to purchasing. Pay particular attention to the "4Cs" of the gemstones: Color, Clarity, Cut, and Carat. Reputable dealers have a laboratory report from an internationally recognized gemological testing laboratory. These include, e.g., Deutsche Stiftung Edelsteinforschung, DSEF in Idar-Oberstein, Gübelin Gem Lab Ltd. in Lucerne (Switzerland) and SSEF in Basel (Switzerland).

Further, the price should always be determined using an appraisal prepared by a court-certified expert for gemstones in Germany. Only these appraisers issue appraisals that are recognized by courts and insurers.

WHICH GEMSTONES CAN I BUY?

You can buy gemstones either cut or uncut. For investment purposes we only recommend cut gemstones. Why? Because there is a significant risk that the gemstone could break or splinter in the cutting process. This reduces the value of the stone drastically. This risk should therefore be borne by the cutter, not the buyer.

It is also advisable to buy either well-known stones such as sapphires, rubies or emeralds, or stones with the potential for increases in value, such as tanzanite, aquamarine, peridot and others. You should always seek out the highest possible quality.

When buying gemstones, in addition to the 4Cs, you should also consider their storage and packing. It is advisable to buy gemstones only in tamper-proof, secure packing with a view of the stone. The gemstone is sealed in a transparent plastic pack with a serial number indicated on it, which can be tracked back to a laboratory report and an appraisal. Only this way can you be certain that you are, in fact, in possession of the gemstone listed in the laboratory report and not an imitation.

Since gemstones are bought anonymously and without any reporting requirements (as with gold), you will have to give thought to the best and safest storage.

First you should decide whether you would like to store the stones at your home or in a secure repository, for example a safe deposit box at a bank.

A NOTE OF CAUTION FOR A BANK SAFE DEPOSIT BOX

Many people think of a bank safe deposit box as their first choice to store gemstones. But there is something that many people do not realize. The opening of each bank safe deposit box is reported by the bank to a national central registration office. Furthermore, the Emergency Act even allows the government to open bank safe-deposit boxes in special crisis situations. Thus these assets can be accessed. The initiation of bankruptcy proceedings also allows for a safe-deposit box to be opened in the presence of a tax administrator. Therefore, if you plan on storage in a safe-deposit box, you would be well advised to seek out a reputable private provider in Germany or to choose a provider abroad, well out of the reach of the German government.

If you store the gemstones at home, you should absolutely clarify with your insurer which conditions are necessary for appropriate insurance protection. Usually a small, simple safe at home is not deemed sufficient. Although often laughed at, gemstones can simply be buried in your garden. Because they cannot be found using metal detectors, however, you should be very careful in noting exactly where you have buried your treasure. Gemstones come from underground. Therefore they can remain buried in the ground free of problems for decades or even centuries, without losing value or beauty.

ADDITIONAL COSTS IN BUYING GEMSTONES

The acquisition of high-quality gemstones is always associated with additional costs. These are incurred primarily for the appraisals and laboratory reports. Finally, the storage costs must also be considered. Storage at home is clearly less expensive, but it is also much riskier than storage in a safe-deposit box or a bank safe.

NOTABLE FACTS ABOUT GEMSTONES

Aquamarine gemstone

For millennia gemstones have appealed to all of humankind with their beauty, not just women. In fact, men were the first to adorn themselves with gemstones. The ancient Egyptians set gemstones in jewelry. Their sparkle and purity stood for the greatness of the early rulers. In India each caste had its own gemstone that was assigned to it.

Sapphires, emeralds, rubies, and other jewels – they all have in common that they originate from the depths of our earth. They are minerals like many other, less noble types of rock. The difference lies in the purity of their composition, their symmetrical internal structure, which is the foundation of their hardness, and different inclusions, which lend an additional colored sheen to transparent gemstones.

A major factor that defines the value of high-quality gemstones is their rarity. While each year around 1,500 tons of gold are extracted, and about 22 tons of diamonds, the total production of, e.g., high-quality rubies is only just under 2 kilograms. Per year. This makes gemstones an extremely desirable, and above all undervalued, investment that will continue to be enjoyed for generations.

Deutsches Edelsteinhaus DEH GmbH
Chief Executive Officers: Alexander Streeb, Oliver Kleimaier

Commercial Register Number: HRB 737047