Investing in Jewelry: Does Jewelry Depreciate?
Jewelry is often seen as something that can elevate a look or as a way of expressing someone's artistic side. But more than that, jewelry is something that some people invest in, whether that includes looking around jewelry stores and auction houses or finding historical pieces, or collecting items that were handed down to them by their ancestors.
Now the question arises: is it really worth investing in jewelry? With that, does jewelry depreciate? If you ever want to invest in jewelry yourself or are just curious about the whole idea of it, read on to understand the basics of investing in jewelry and how a piece appreciates or depreciates.
Why People Invest in Jewelry
People look into investing in items they know can benefit them in the long run. For some, this includes investing in cars or apartments, but others consider investing in pieces of jewelry.
Jewelry investors consider this because of the very nature of genuine jewelry. High-quality jewelry pieces are durable and last long. This means investors can wait long without worrying about losing the quality of items that appreciate more over time, including vintage jewelry or antique pieces. Thus, the selling price or the price at auction could significantly exceed the amount they paid during their initial investment. In that sense, putting your money on high-quality pieces with precious metals and gemstones is definitely an excellent investment option.
Does Jewelry Depreciate Over Time?
The answer is, it depends on the type of jewelry and the material used to make that piece. With that said, artificial or costume jewelry depreciates faster than higher-quality pieces. Once you purchase this type of jewelry, its value could already decrease. Similar to gadgets like laptops and phones that you can buy for a smaller price when it’s secondhand, the same case happens for specific jewelry pieces.
However, there are some exceptional cases where jewelry pieces are appreciated instead. The value of historic, rare, or antique jewelry can increase over time (more on that later). For example, the value of vintage jewelry made of natural diamonds that were passed down to you might be worth more now than it did ten years ago.
Factors Affecting Jewelry Depreciation & Appreciation
Okay, so now you know that jewelry could appreciate or depreciate over time. Now the question is why? Some factors affect a piece’s value, including quality, time, rarity, and market value of materials.
Generally, high-quality pieces depreciate much slower than lower-quality and cheaper jewelry. For example, a necklace made with cheaper materials like copper or bronze would depreciate rapidly compared to one made of gold or platinum. The piece’s quality that’s tied to a certain brand can also affect its price. If you buy something from a well-established brand in the jewelry industry that sells higher quality items would depreciate much slower than similar pieces as well.
Another factor that affects jewelry value is time. How it affects a piece would depend on the type of piece you have. For lower quality or artificial jewelry, its value would decrease as more time passes. On the other hand, the value of rare or antique pieces would appreciate over time.
In line with time, rarity also affects the value of a piece. The rarer your piece is, the more it could appreciate over time.
The value of certain metals may also affect the value of your piece. Due to certain economic conditions, the value of some metals could either increase or decrease, affecting how your piece appreciates or depreciates. For example, market recessions could sometimes lower the value of gold.
However, this is a minor concern. Even if its value fluctuates due to market demand, the depreciation isn't too weighty, and its value would return to its original value or appreciate over time.
Types of Jewelry That Hold Value
Fine jewelry holds value compared to costume jewelry. Pieces made from precious gemstones (ex., diamond, emerald, and sapphire) and precious metals (ex., gold, platinum, and palladium) maintain their value over time because of certain characteristics. For example, they are more durable and versatile, making them less prone to the “wear and tear” that comes with lower quality or artificial jewelry pieces.
Tips for Investing in Jewelry
Invest in legitimate jewelry products
Finding real jewelry pieces may seem too expensive to purchase, but your return on investment is worth it in time. Of course, the retail price, especially from known brands, would be higher compared to others since sellers consider things like the cost of labor and other overhead costs; however, it's much better to invest in these kinds of jewelry instead of cheaper ones with fake gemstones.
Look at the jewelry hallmark
One thing to check out when choosing a piece to invest in is the jewelry's hallmark. This shows information like metal content and country of origin, which would let you know the "purity" of the material used for your jewelry item. A piece's hallmark can give you an idea of whether the item is worth purchasing and keeping as an investment.
Find a reputable jewelry dealer or seller
Although some fake pieces might have intricate designs that make them seem legitimate, you should be wary. This is why buying your jewelry from a trustworthy source is best. Even if you're putting out more money as you buy a ring, necklace, or other types of jewelry, you'd be getting more from your investment if you know you're getting a high-quality piece from a reputable brand or seller that you know you could trust.
Get an appraisal for insurance
When you get high-quality jewelry, one of the best ways to get a sense of security is by getting it insured. For example, let’s say you got a beautiful diamond engagement ring. You can find the best insurance policy for you so that in case something happens to your ring, you can receive an amount close to the monetary sum needed to replace it.
While in the Philippines, there’s no stand-alone insurance policy for jewelry pieces, you can opt to get insurance from other countries that offer this type of product. To get started with this insurance process, you first need to get a jewelry appraisal for insurance as an insurance company would most likely require this of you.
Get an appraisal from Willyn Villarica Jewelry
Understanding that insurance appraisals are critical, especially if you want to secure a piece of jewelry you’ve invested in, you’d want to get an insurance appraisal from a trusted professional.
Willyn Villarica is the only appraiser in the Philippines that the National Association of Jewelry Appraisers recognizes. So you know that with Willyn Villarica Jewelry, your jewelry is in safe hands, and you're sure to get quality service.
Reach out to us by sending an email to email@example.com. You can also send your inquiries through our Facebook page (Willyn Villarica Jewelry) or Instagram (@willynvillarica_jewelry).