The market for fine jewelry is a fast-paced one. Jewelers are some of the most skilled mashups of salesmanship and craftsmanship that exist in any industry today. But the trading market for jewelry remains a volatile minefield that many investors are too afraid to enter.
Investing here may be the right move for you, or it could act as a simple hedge fund in order to take on other investment opportunities. No matter how you choose to approach the fine jewelry marketplace, beginning with a strong discipline rooted in research is the only way to move forward with this or any other investment opportunity with any success.
Start by doing your homework.
Investing in any asset class requires huge volumes of research. It’s simply the only way to find success in any marketplace. Without a firm plan for how you will create growth among the assets held in your portfolio, you just can’t expect a return on investment of any real substance. In fact, investing without a plan is the best way to lose money! No investor––accredited investors and retail investors alike–– wants to lose on their trades, which means that research reigns supreme, no matter what market you are approaching.
This is especially true for the jewelry trade. Whether you are looking at a diamond and ruby necklace, or a sapphire ring with additional stones in a halo effect, the purchase of these collateral assets must be done with caution and a strong reliance on market fundamentals. Jewelry is fundamentally volatile in price structure, as an alternative investment, the collateral vehicle shows a low correlation to stock market pricing or bond rate fluctuations, however, the market is a speculative paradise for high-risk high reward trading. This is because the commodity must be appraised by an independent expert first, and many factors can alter the valuation by a considerable percentage or dollar figure.
In the stock market, assets trade on a known pricing chart, and fluctuations are typically minimal. Any number of factors may play a role in the reappraisal of a piece of jewelry that you wish to resell, and if you are selling at an auction house, you may leave with a high dollar value or simply be hung out to dry by a minimal interest in your asset. The uncertainty here is what makes for a high-risk commodity asset. However, with some due diligence on your part, you can identify and purchase antique pieces with a fantastic history which you can hold for years or even decades in order to boost the underlying asset value.
Adding necklaces, pendants, or rings to your collection of collateral assets is a great way to bolster an existing real estate investment portfolio or stock market account that has reached its upper limits on yearly return on investment. In addition, taking on new alternative investing options to your estate is a great way to create additional wealth for you and your family.
Utilize jewelry as a collateral hedge for other investment opportunities.
The real value of the jewelry trade is in its value as a collateral instrument and a hedge against other investment opportunities. In addition, buying into a fund that manages a portfolio of precious jewels and pieces is a great way to mitigate your physical risk while trading in this commodity. As with any asset class, rebalancing is a crucial step to making your money work for you.
Instead of conducting a rebalance yourself, trading platforms like Yieldstreet offer managed funds that engage in the trade and holding of jewelry and other alternative investment commodities. Many investors initially ask “is Yieldstreet a ripoff?” considering the wide range of assets the platform can offer access to, but the truth is that this level of diversification is often coming to retail investors for the first time. High net worth individuals have been investing like this––and enjoying the profits––for many generations.
It’s time a platform like Yieldstreet levels the playing field.