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By: Adelaide Holcomb

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Wednesday, 27-Jun-2012 19:42 Email | Share | | Bookmark
Buying Loose Gemstones Can Bring Returns And Fun

Like precious metals and other long term investments, loose gemstones offer a media for investing that holds its value regardless of inflation. Individuals buying the stones may find opportunities to improve their value even more. Others choose to buy these products for the fun of collecting.

Regardless of one's reasons for buying such stones, consumers are warned to avoid stones advertised as investment grade. Although it is legal to use the term in the United States, the Federal Trade Commission says that it, along with the terms precious and semiprecious hold no meaning. It is often abused by those selling stones. Many investors have found that gems requiring less initial investment actually appreciate more.

While investors can make money with gems, they should be knowledgeable of what they are buying and always use common sense along with knowledge. Generally, values keep up with the inflation rate, but they are somewhat more volatile than precious metals. Scientific discovers can affect the value of the gem, as with blue topaz, once considered rare, but less valuable once the process to convert clear topaz to blue was discovered. Closing of the primary source of tanzanite caused this gem to increase in value. Overall, these types of changes in value are rare.

When purchasing for investment purposes, be sure to seek wholesale sources. Primary dealers mine and cut the stones themselves and are able to offer the best prices. Secondary dealers buy from others in the field and must make a profit when reselling the stones, but can offer good prices. Estate sales can provide good bargains to the informed investor.

When buying gems like these, remember that lower priced stones will have a higher percentage markup than more expensive ones do. Jewelers may set a minimum price to cover expenses of ordering the low cost gem that is several times its value. On the opposite end of the scale, diamonds may carry less than 10% premium.

Along with investment values, buyers may see substantial price increases by cutting rough stones and when the stone is set into jewelry. Although these steps take additional effort they can increase the value of the gem. If investors cannot do the work for these upgrades, many skilled craftspeople offer the service.

Collectors and investors may find the gems are a perfect way to save for the future. If sudden needs arise, such as a vehicle in need or repairs, the collection can be sold to raise cash. Additionally, stones offer a good media for trade with other collectors or dealers in order to improve the net value. Trading gems offers an effective means of improving one's worth when stones were originally priced at less than market value.

Loose gemstones provide a good investment for many people. Investors are generally able to meet and beat inflation with the investment. Additionally, collectors find this to be a fun as well as rewarding hobby. It is one that is easy to both begin and end as many people are interested in buying these stones.


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