Top 4 Gem Investments

Do you know that diamonds are essentially worthless? You must know that if you want to invest in precious gems. Such an idea goes against our basic programming because we have been essentially programmed to believe that diamonds are, “rare,” and valuable when nothing could be further from the truth. Diamonds are not a wise investment because they don’t accrue in value and you can never resell them at a profit.

If you have ever tried to sell a diamond ring, then you understand. You might be able to sell a diamond ring worth $1,225 for about $70. Diamonds and other rare gems were truly valuable in the 17th and 18th centuries because they were truly rare then, hard to source, and only limited amounts were produced each year. When the De Beers cartel mass produced diamonds in the 19th century, it caused a problem.

Now, there were too many diamonds. The De Beers cartel controlled diamond transacting for the world for the 20th century and still mostly does. They created a campaign in the 1930s that you had to fall in love and give your betrothed a diamond ring. They control the supplies of diamonds in the world and only release strategically miniscule amounts – if they released them all, they would be worthless.

Diamond merchants sell diamonds on speculation – they get no appreciable profit from buying back the same diamond ring they sold to you for thousands of dollars, or more. Hard to believe? Well, in 1983 there was an estimated 500 million carats, or more, of diamonds in the global marketplace. Does that sound like rarity to you?

If you’re interested in investing in precious gems, you should look for gems that are rare, in diminishing supply, and will generate demand in the decades to come. Here are a few:

Tanzanite – Value: $1,200 per carat

Tanzanite is a rare and precious gem that can only be found in the wilds of northern Tanzania around the base lands of Mount Kilimanjaro. It has a distinct blue-violet tint and was first popularized by Tiffany and Co. jewelers. Tanzanite supplies are finite until new sources are found. They are a good investment now because they will become extremely rare in about 25 years.

Taaffeite – Value: $2,500 per carat

Most people who love gems know what a diamond but have never heard of taaffeite. When it was first discovered in the early 20th century, it was mistaken for another gem, spinel. An Australian gemologist named Richard Taaffe properly discovered it in 1945. It is only sourced in Sri Lanka and Tanzania and are one million times rarer than diamonds.

Demantoid garnet – Value: $3,300 per carat

Demantoid garnet is an ultra-rare gem that was discovered in Russia in the 1800s. Unlike most precious gems they are rarely treated. They are so rare that you might have difficulties acquiring demantoid garnets larger than 2 carats.

Red Beryl – Value: $10,000 per carat

Red beryl is a rare emerald that collectors rarely like to put up for sale. This gem is mined in Mexico, New Mexico, and Utah. However, it is the red beryl mined from the Wah Wah mountains of Utah that is primarily processed for gems.

Know Your Gems

Speak to experts, do your research, and consider the collector’s market in the future before heavily investing in rare gemstones. Still, it’s a much better investment than buying diamonds. The Argyle diamond mine in Australia opened in 1983, was the world’s largest diamond mine, produced over 800 million carats, and produced 90% of the world’s pink diamonds.

It closed in July 2019. Ask yourself: If diamonds are so rare and valuable, why would the world’s largest diamond mine go out of business?

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