How to invest in gems? How can we be sure that the value of our collection is the right one? How to protect oneself against scams?
The interview of Héloïse, our Fine Art Specialist, who has a double degree in private law and art history and specializes in law, insurance, and the expertise of art objects.
1. Colored diamonds, as extremely rare special assets, appeal to both gems collector and investors. How do you advise these two types of clients?
The investor generally buys stones that are not mounted and that are mainly intended for investment purposes, i.e. to be kept in a safe deposit box for example. Here, the risk of “damage” is less than for a stone that will be mounted and worn, but the expertise is just as important to :
- to know the quotation of the stone in a first step
- then, the adequate insurance in connection with the “right” price established.
As far as the gems collector is concerned, where the jewel is to be worn, the importance of insurance is even greater! However, due to a lack of knowledge, the vast majority of them do not do so, or do so too late, after a damage. Because an accident happens quickly, whether it is a crack, a theft, a loss etc.!
In both cases, investors or collectors, I advise my clients in the same way: to insure these precious stones, in order to know their quotation on the one hand if it has not been done beforehand, and to protect oneself from any damage / theft / loss etc. via a correctly established insurance contract. Insurance for this type of property is not a significant cost – especially when compared to the value of the stones. At PSPI, we tailor our contracts to limit this cost.
2. In this specific market, what is meant by “value” / “quotation”?
What you need to know is that gemstones are safe havens, whose prices do not drop suddenly or drastically. But beware, this applies to stones whose value is certified! It is important to know the origin of the stone to have information about its value.
Laboratory expertise will determine the quality of the stone (without giving a price). It is necessary to double these expertises in laboratory by expertise of gemmologists to have a quotation the closest to reality.
Because there are two risks:
- The false stones which circulate on the market: example a colored diamond but whose color was worked artificially. This means that its irradiation is artificial
- Stones with a dubious past: “Blood Diamonds”, stone theft etc…
If the price of the stone is not high, be careful! It is necessary to redouble vigilance on the quality of the stone and on its origin!
3. What are the risks linked to the purchase of these goods ?
The biggest risk when buying these stones is the scam.
Therefore, two steps are essential:
Find out if you can obtain one of the certificates (GIA, IGI etc.) that will give an expertise of the stone, without assigning a value to it (for the sake of neutrality of these organizations).
As a Fine Art Specialist, I can mobilize a whole network of experts who will give me the price of the stone: this requires a whole logistics that we can mobilize in only a few days at PSPI, this is the essential role of the broker specialized in this very particular field.
To conclude, as this is a very specific market with relatively stable prices, if the stone does not have a fraudulent past and the expertise is correct, it is very interesting to invest in this type of special property.
Read more about Heloïse : https://www.pspi.ch/en/a-fine-art-specialist-in-the-pspi-team/