Anecdotally, at least, gemstones appear to be attracting more interest as a potentially profitable collectible. Part of that interest stems from headline-grabbing auction results, such as the $45.6 million sale of a rare pink diamond at a Sotheby’s auction in Geneva last November.
It’s not just the rarest stones increasing in value: Overall gem prices have increased steadily in recent years, as well. For example, from July 2005 to May 2011, the Gemval Aggregate Index, which tracks prices for 26 gemstone standard specimens, has outperformed the Dow Jones Industrial Average while avoiding the equity market’s volatility.
Some experts have expressed a bit of skepticism over the Gemval numbers but agree that gem prices have been heading higher. “There’s no question that stones have gone up,” said Richard W. Wise, a graduate gemologist, president of R. W. Wise, Goldsmiths Inc., in Lenox, Mass., and author of Secrets of the Gem Trade: The Connoisseur’s Guide to Precious Gemstones.
“There have been auction records for Kashmir sapphires, for colored diamonds, for Golconda diamonds, one after another over the last few years, Burmese rubies, Colombian emeralds. Of course, these, bear in mind, are auction records so that’s only one portion of the market but there’s no question that gemstones have increased in value,” Wise said in an interview.
Does it make sense for your clients to move into investments that sparkle? Probably not, he says, unless they have access to wholesale markets or are very long-term investors, because the spread between wholesale and retail is wide.