Jewelry box or financial portfolio? The case for buying fine jewelry.

Did you ever think of your jewelry as part of your financial portfolio? Chances are you haven’t. After all, jewelry is color, design, style, fun. It is part of the fashion department, not the boring finance department.

Well, think again.

I did a brief analysis of gold prices, diamond prices and the performance of the top stock market indexes – the SP 500 for the NY Stock Exchange and the Euro Stoxx 50 for the Eurozone stock market – and do you want to know what I found?

Take a look at these growth rates:

Gold prices, diamond prices, SP 500

Had you bought gold five years ago, you would have a total increase in your asset value of 161%, while your SP 500 index funds were on the negative side of flat, with a -1.3% variation. For the past year, the comparison is similar: gold had a positive growth of 24% whereas the SP 500 only grew 3.7% (and I am rounding up).

The comparison is even more dramatic for the European investor: the Euro Stoxx 50 had a negative performance for both periods, -10.4% for the past year and -36.8% for the past five years, while gold prices in Euro yielded the same positive returns as in USD. This means that if you had 100€ invested in a Euro Stoxx 50 index fund in February 2007, today you should have about 63€. The same money used to buy gold is now worth 161€.

Diamonds have been following the gold price trends and also had nice growth rates for the past 5 years: +46.8%.

Why am I talking about this, you ask?

Because I want to stress the fact that fine jewelry is also a financial asset that will potentially appreciate in value and increase your wealth over time.

In fact, when you buy a piece of jewelry, you are making an asset allocation decision on top of a fun fashion choice. And that is one of the reasons why I love jewelry!

If you doubt what I am saying, take a look at recent jewelry auctions’ results. And don’t forget to get back to me: let me know, were you surprised?

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About silviataveira

Business woman and entrepreneur. Healthy food evangelist. Also loves books, jazz music, jewelry design and life in general.
This entry was posted in Diamonds, Jewelry and tagged , , , , , , . Bookmark the permalink.

One Response to Jewelry box or financial portfolio? The case for buying fine jewelry.

  1. Pingback: “Les mains d’Hermès”: how real hearts go into crafts | Sílvia Taveira

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