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Why Other Stones Are A Safer Investment Than Diamonds

By Jason Markum

I decided long ago that investing in the stock market is a fairly treacherous undertaking. Don’t get me wrong, it’s perfectly fine for most people and in fact I do invest a little bit in the stock market myself in carefully chosen mutual funds. But as far as picking stocks goes, I’m horrible at it so I tend to look for other vehicles to invest my money in so that I have a nice nest egg for retirement.

Especially today when we’re facing potential high levels of inflation for the years to come, it’s a good idea to diversify outside of the stock market into physical items like gold and precious metals and precious stones such as diamonds.

But many people don’t realize that diamonds aren’t the only stones that are worth investing in and in fact rubies, emeralds, and sapphires may be an even safer investment than diamonds and that is exactly what I’m going to talk about in this article today.

Back when the prices of most investment grade diamonds plunged as much as 20 to 30%, many of the colored gemstones mysteriously held on and even had price gains. How is this possible? Well the reason is one word… scarcity. In any given year there may be only $200 million-$300 million worth of rubies, sapphires, and emeralds sold in America.

Even a first-year economics student can tell you that when supply is down, price goes up so scarcity leads to price increases over time. Unfortunately most people don’t know a whole lot about investing in these gems. So here are a few things you should look at.

First look at the grading. A good gemologist can distinguish between synthetic stones and real ones and they can often sometimes even tell you where the stone came from because certain countries command higher prices for some stones.

Next look for any flaws. The fact of the matter is, most gems have some sort of flaw but as long as it’s not a huge flaw you should be okay.

Next look at the color. Color is often one of the most important determinants of price, as crazy as that may seem! Never look at just one stone at a time, you’re always going to want to look at it next to several others because the clarity of the stone will jump out at you in relation to other stones in a way that it won’t if you look at it singly.

The best place to buy gemstones is at a family operated jewelers that has been around forever and has a great reputation within your community. Larger chains often just buy in bulk and sometimes they don’t receive the best selection whereas your small-town jeweler knows exactly what he or she is looking for and only buys the best.

Investing in gemstones other than diamonds is not for everybody and in fact you may have to do more research than you’re willing to do or want to do; but if you think that it’s something you may be interested in, there aren’t many more satisfying ways of investing out there than to be able to hold these beautiful jewels in your hand day after day.

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