The Top 10 Gemstones for Investment

When considering gemstones as a viable investment, it's crucial to identify those minerals that have exhibited consistent price appreciation over several years, irrespective of market trends. While renowned gems like rubies, sapphires, and emeralds are household names, other stones like alexandrite and tanzanite also hold investment potential.

Essential Insights into Gemstone Investments

In various other articles, we offer comprehensive guidance on key considerations for investing in gemstones, explain why gemstones are attractive for investments, and discuss the composition of a well-rounded gemstone portfolio.

Here are the key factors to remember:

Purity and Natural Origin: Almost all gemstones are suitable for investment when they are in their natural, untreated, and expertly cut form, with vibrant, natural colors.

Reputation: The mineral's reputation is a significant factor influencing its suitability for investment.

Minimum Weight: Colored gemstones, such as rubies and sapphires, become appealing investments when they reach a weight of one carat (1 ct. = 0.2 g), while diamonds become of interest at 0.5 ct.

Certification: To be considered an investment-grade gem, it must possess an internationally recognized certificate from a reputable gemological institute.

Allocation: As a general rule of thumb, allocating 10% to 20% of liquid assets to gemstones is advisable, with a long-term investment horizon of five years or more in mind.

Over the past few decades, market prices for naturally colored, untreated gemstones have witnessed remarkable appreciation.

Why Diamonds Are Less Ideal for Investment

Despite their popularity, diamonds have demonstrated vulnerability during economic crises, such as the 2008 financial downturn and the COVID-19 pandemic. However, diamonds can serve as viable investments when held for extended periods, preferably beyond 20 years.

The Three Premier Investment Gemstones

The top spots in the list of investment gemstones are invariably occupied by ruby, sapphire, and emerald. These three gems are particularly sought after, and the choice among them should be influenced by individual preferences and the existing portfolio.

1. Ruby:

Rubies, the second hardest mineral after diamonds, are both rare and highly valuable. The most coveted rubies are the pigeon blood red variety. Investments in rubies are typically considered for stones weighing 1 ct. or more, with clear, red stones of 5 ct. and above being true rarities. Investors can anticipate an average annual price increase of 5-8%.

2. Sapphire:

Sapphires come in various colors, with deep blue sapphires, particularly those from the Indian Kashmir region, holding the highest value. The Padparadscha sapphire, exhibiting an orange-pink hue akin to lotus blossoms, is also in demand. Sapphires weighing 1 ct. or more are attractive for investments, and the current popularity of the specific color variety significantly impacts price dynamics.

3. Emerald:

Emeralds, the green variety of beryl, are prized when they are clear and display a deep green hue. The so-called emerald cut, resembling a rectangular shape with beveled corners, is favored for emeralds. Investors typically consider clear stones with a beautiful color saturation weighing 1 ct. or more for their portfolios.

Other Investment-Worthy Gemstones

The following gemstones are not ranked but are known to provide stable value appreciation over several years. For valuation, selection, and purchase, expert opinions are strongly recommended, as these gems are rare and, in some cases, relatively undiscovered in the general market.

4. Tourmaline:

Tourmalines exist in a vibrant spectrum of colors. "Paraiba Tourmaline" is a term initially coined for intensely turquoise-blue gems from Brazil but now extends to stones from Mozambique and Nigeria, provided they meet specific color and mineral concentration criteria. For investors, tourmalines with strong colors, eye-clean clarity, and a weight of 5 ct. and more are particularly appealing. Paraiba tourmaline can also be considered for sizes as small as 1 carat.

5. Aquamarine:

The name "aquamarine" originates from Latin, translating to "sea water." Aquamarine, the blue variation of beryl, is highly esteemed, with "Santa Maria aquamarines" from the Brazilian mine of the same name being of exceptional quality. However, the intense blue sought after in gemstones is rare in naturally occurring stones and is often achieved by heat treatment.

6. Alexandrite:

Named after Tsar Alexander II, alexandrite is a chrysoberyl variety with a Mohs hardness of 8.5, making it the world's third hardest mineral. A unique feature of alexandrite is its color-changing nature, transitioning between red and blue based on lighting conditions. For investors, gemstones weighing 1 ct. or more are appealing.

7. Tanzanite:

Tanzanite, sourced from a small area in Tanzania, is known for its deep blue hue. Most tanzanites on the market are heat-treated to enhance their color by eliminating brown and violet tones. Large tanzanite stones, especially those over 5 ct., remain in high demand due to export restrictions. Notably, tanzanite is one of the few gemstones where heating does not lead to price depreciation.

8. Spinel:

Distinguished from rubies only in the early 19th century, red spinel has garnered recognition as a fascinating gemstone since then. Bright red, clear spinels are highly sought after, with pink spinel varieties gaining popularity. Red spinels are still more affordable than rubies but are poised for substantial price increases, particularly for high-quality stones weighing over 10 ct.

9. Peridot:

Peridot, an exceptionally pure olivine variety, exclusively occurs in shades of green, ranging from light green to olive and dark green. Unlike other gemstones, peridot does not undergo treatments like irradiation or heating, and its green coloration is always natural. While peridot remains relatively affordable compared to green gems like emeralds, prices have risen for high-quality stones in recent years.

10. Colored "Fancy" Diamonds:

While many people are unaware of the variety of colors diamonds can display, "fancy diamonds" appear regularly among the most expensive stones at auctions. Pink, orange, and blue diamonds have fetched record-breaking prices in the millions. For potential investors, colored diamonds represent a compelling choice, starting from a size of 0.5 ct.

When considering gemstones as an investment, careful selection, expert guidance, and a long-term perspective are key to success. These gemstones hold substantial value and promise a solid return on investment.