How to Invest in Precious Metals and Jewelry Wisely

Precious metals and jewelry have always been rewarding investments. Gold, diamonds and other valuable stones are valued as coveted jewelry and over time they gain value, sometimes spectacularly when the maker becomes popular or the pieces become vintage heirlooms.

Big investors like George Soros and Stanley Druckenmiller are betting big on gold which goes to show that they expect the metal to see a rise in price and demand.

Investing cannot be easily explained as methods of ensuring your savings grow in value over a period of time. The type of investment you choose, the period of holding the investment and the amount invested all depend on a variety of factors.

Women understand jewelry and tend to look on it as a way of investing money in something we love and appreciate. But there are pros and cons we need to be aware of.

If you want to be invest wisely, play the game smartly and see your household savings grow over time, then here are a few tips for you.

1) Invest in the Right Product to Win with Gold

The price of jewelry whether it is gold, silver, platinum or precious stones reflect making charges which markup price by almost 30%.

So you are paying 30% more than the value of gold in it which in turn makes it a not-so-wise investment decision.

Consider investing in ETFs, gold mutual funds, bullion, gold stocks, options and futures. You need to decide between the various options and choose a suitable one based on your familiarity with the products, risk appetite and market experience.

Gold ETF

ETFs are exchange-traded funds that have grown in popularity over the past few years. They are a type of mutual fund that trades on stock exchanges like ordinary stocks. Mutual funds hold assets across various classes whereas gold ETFs hold physical gold or bullion as their only asset.

Bullion

Bullion or physical gold can be purchased at retail outlets easily. But when you try to sell them the process becomes far more difficult. For the best deal and to get cash for gold it is necessary that you choose reputed gold dealers.
Another point to note is that you will get wholesale prices when you are trying for a resale. This might result in a small loss but if there has been good appreciation then you will be able to make profit.

Gold Mutual Funds

Many people prefer to keep away from investing in actual gold. If you too want to keep investment in baubles to a minimum then gold mutual funds work the best for you. They take advantage of the age-old value of the precious metal but also couple them with solid business tactics and planned growth strategies of established companies.

Gold mutual funds invest in reputed high-capitalization gold mining companies. These companies own and operate big mining facilities that yield fixed outputs of gold and are not prone to volatility.

The shares of mining companies grow in value as the price of gold shoots up and the metal becomes an increasingly costly commodity.

Junior Gold Stocks

Junior gold stocks are shares of young mining companies that are in the pre-mining or exploration process. They do not own productive mines but are close to gold discoveries.

The potential of losing money in these investments is high but so is the potential of striking 3-figure return on investment.

If you have a high risk appetite or if you are an early bird starting out early in life then you can give junior gold stocks serious consideration.

Gold Options and Futures

Gold options and futures are best suited to an experienced investor quite familiar with marketing dynamics. You need to speculate on the price of the commodity and take a call in the highly volatile commodity market. If you are not a pro it will be best to leave this job to the market experts, and stick to the other forms of investing.

2) Diamonds Make for Tricky Investment

De Beers made diamonds every girl’s best friend and a must-have for any new bride, and diamonds are among the most expensive purchases we make. But their investment value can be speculative at times.

Diamonds are difficult to trade. If you want to sell your diamond it will be hard to assess its true value at a jeweler. There are many factors affecting the price valuation of diamond, the most important being the vague ‘4C’ factors.

Diamond has no quantifiable melt value, no universal marketplace for trading, limited liquidity and is not fungible. Gold is fungible which means a 1-ounce gold coin can be split into several smaller weight denominations, whereas a diamond cannot.

But with the demand for diamond growing by leaps and bounds in China and India, there has never been a better time to invest in diamonds.

If you are looking to unlock the value of your diamond jewelry, there are a few things you need to keep in mind as outlined in this handy post. It is essential that you do not work in haste and make a bad selling decision.

There are several selling options available. You can either sell to a trustworthy jeweler, pawnbroker or a diamond dealer. You need to do your homework well before finding the right names to deal with. You can also sell through Craigslist, eBay or new online marketplaces like idonowidont.com.

Small retail investors will find it tough to invest in diamonds where even a single carat rock costs a few thousand dollars. But if you have serious money to spend then diamonds can be great for diversifying your investment portfolio.

If you have a certificate or report from a reputed institute or laboratory like Gemological Institute of America (GIA), or laser inscribed unique identification mark/number on the girdle, then you can be confirmed about the authenticity of the diamond you possess, making it worth every dollar you spend.

3) Consider Silver

Silver is a popular metal used in jewelry and fine silverware. If you like the elegant shine of silver and are convinced about the long-term returns it will generate, you can consider investing in silver bullion or silver-backed ETFs.

You can also buy shares in silver-streaming companies and mining companies that are involved in or financially support metal mining activities.

A drawback of investing in silver is that the metal is very volatile and tends to be swayed by global political uncertainty and financial situations. But if you have a high risk appetite there is a good possibility of bagging stratospheric returns on the money you invest.

Conclusion

Precious metals like gold and silver have always been viewed by cultures and civilizations as symbols of wealth and prosperity. Gold plays the familiar centuries-old role of being the only truly global currency to this day, and is the only recognized standard of value during wars and financial crisis. So invest your money wisely and risk sensibly to make the most returns of investing in precious metals and jewelry.

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