Traditionally, New Zealanders have favoured property and cash savings as a store of wealth. Some also add stocks and precious metals such as gold or silver to their investment portfolio. We are now seeing extremely low-interest rates, making it of little incentive to keep cash stored in a bank account while expecting long term growth. Even on a term deposit, little is gained.
Sapphires, precious gemstones and jewellery have long been an alternative investment option and now more than ever a very viable long term investment strategy that will allow your money to grow in an aesthetically pleasing way. Over the past 30 years, there has been steady growth in the prices of coloured stones. The worldwide demand for quality sapphires and precious gemstones far exceeds the supply, and prices have steadily moved north over time. With a finite supply of sapphires and precious gemstones and demand for natural earth-mined treasures increasing, prices will continue to rise over the next 10 years. Add reduced mining due to COVID restrictions and closed borders in many countries, and you have the perfect storm for sharp increases in precious gemstone prices.
When choosing sapphire for investment purposes, there are several factors to consider:
When selecting a sapphire you should consider a specimen that is prized in colour and carat size. This will make it easier to sell when the time is right. Velvet blue, royal blue, cornflower blue, padparadscha, vivid pink and canary yellow command higher prices. If you purchase a sapphire 3 carat or more, this will also increase the value over time. Corundum such as Kashmir Sapphire and Burmese Ruby are extremely rare in over 1-carat size and command extraordinary prices. Excellent quality Sri Lankan Blue & Padparadscha also command high prices however are easier to source in larger carat sizes, so ideally, for investment, the bigger, the better - my recommendation would be 3 carats plus. The hue of a coloured gemstone plays an integral role in determining its price. You could have the same cut, clarity & carat in 2 gemstones; however, a velvet blue will command a much higher price than a greyish blue. The hue is where the ultimate value is found in a gemstone such as sapphire, so it is important to choose a stone carefully, keeping desirable hues in mind.
The origin of a gemstone is an important factor. Kashmir Blue Sapphire, Burmese Pigeon Blood Ruby, Sri Lanka Blue Sapphire & Sri Lanka Padparadscha are the most valuable per carat coloured gemstones. They will hold their value and increase over time. The larger the size, the rarer the gemstone, and the more valuable it will be in the long term.
Cut and Clarity should be considered. Select a gemstone with a high-quality commercial-grade cut. The facets should bring out the natural sparkle, lustre and life of the gemstone. A well-cut sapphire or spinel will be magic for the eyes. The gemstone should have good clarity - eye and loupe clean stones will command a premium. Slightly included stones still fetch high prices, and inclusions, in some cases, can add to the uniqueness and beauty of a gemstone. However, too many inclusions will reduce the value - unless you purchase something like an emerald or paraiba tourmaline where heavier inclusions are considered normal.
The closer a gemstone is to its natural form, the more valuable it will be. Heat treatment does not drastically affect the price of a good sapphire, but an unheated quality sapphire will command a premium price. Stay away from gemstones with treatments such as beryllium or lead filling, which greatly reduces their value.
Here is an example of how The Sapphire Merchant can assist you with buying gemstones well for investment purposes. We handpicked this stunning 4.87ct cornflower blue sapphire mined in Sri Lanka at the Chanthaburi Gemstone Market in Thailand (see photo). Going to a market hub such as this allows us to negotiate a very reasonable price. Once back in New Zealand, the sapphire is valued by a gemologist and registered valuer to determine its value on the New Zealand market. This cornflower blue sapphire example is valued at NZD 19500 (New Zealand Dollars). Because we reduced the supply chain and brought directly from the gemstone market, our sapphires and precious gemstones are much closer to wholesale price. We were then able to offer this cornflower blue sapphire to the New Zealand market at $5649. Close to a quarter of its New Zealand value.
When investing in sapphires and precious gemstones, it is also helpful to note that buying more or in bulk gives more negotiating power to reduce the individual pricing of gemstones further.
The Sapphire Merchant can assist you with securing quality precious gemstones such as sapphires for investment and as an alternative store of wealth. We offer the best prices for sapphire in New Zealand, and buying well at the beginning will assist in realising value in your investment later on. To discuss investment options, don't hesitate to contact me to assist you with planning your precious gemstone portfolio.
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