Exquisite Emerald Gemstones Appeal to Investment Seekers

Many investors who need a private, portable, non-detectable asset, are investing in high quality emerald gemstones, to increase and maintain the value of their investment portfolios. Why? Like gold and silver, precious gems tend to hold their real value in all currencies and can even provide an alternative to paper currencies. Moreover, gemstone investments are widely considered the smallest physical store of money around.

There are three main emerald mining areas in Colombia: Muzo, Coscuez, and Chivor. Making an investment in emerald from Columbia, especially those from the Muzo mines, will (by far) command the highest value in the market. Generally speaking, they are well-known for their exquisite appearance, large crystal size; and minimal impurities. In fact, A high quality Colombian emerald, will fetch a 10 to 20 per cent premium over African and Brazilian emeralds; of similar size and clarity.

Many investors prefer gemstone investments, because they are extremely portable, and easily concealed or stored. Furthermore, gemstones are the most concentrated form of wealth, known to man. Surprising to most, a precious gem worth $100,000 fits in the palm of your hand, yet weighs less than a penny.

Tangible Investments Restore Investor Confidence in Investing

Who wants to bet that the New Year holds a record number of money and financial resolutions, for investors in 2013? The first of which will likely be, a direct approach at improving their investing strategies and unproductive investment portfolios. Unsatisfied with the traditional approaches to investing, investors all around the world are demanding recognizable change.

At the top of the list of growing concerns, is the preservation (at the very least) of an investor's principle and personal wealth. This is especially important criteria, for investors who are saving for retirement or live on a fixed income. In this instance, it is paramount that investors find investments that protect against rising inflation and the negative effects of economic uncertainty.

For investors who want to keep their investments close, because they are concerned about protecting their long-term wealth, an investment in a tangible assets can offer a safer alternative; to tumultuous stock markets and low yield bonds. In most cases, traditional investments pale in comparison  when compared to the consistent performance of precious gemstones, like investing in emerald, ruby or diamond; for example.

All things considered, investors are just not happy with the performance of their traditional investment strategies, and they have voiced their readiness for change. With that being said, alternative investments are rising in popularity, as more investors display confidence in investing options like gemstone investing, and embrace opportunities that have demonstrated that they can produce profits; regardless of the performance of other asset classes.

New Approach Makes Investing in Emerald Much More Affordable

Gemfields, a London-based gemstone and mining company, reported recently that their revenues have more than doubled; in the past year. The company is a leading producer of the world’s emerald supply with an approximate 20 percent market share and is looking forward to substantial market growth in the years to come.

Earlier this month, Gemfields announced that their Kagem emerald mine in Zambia has the potential to produce 1 billion carats of emerald and beryl generating a value of close to $900 million over the course of the next twenty years. Needless to say, shareholders of the company are more than happy over the recent announcements, knowing that they put Gemfields in a strong growth position moving forward; into the future. The company’s stock rose 11 percent on the news of the announcement, currently valuing Gemfields stock in the neighborhood of £135 million.

Analysts say that Gemfields has created the world’s first integrated pipeline, that will bring emeralds directly from the mine into the international market; allowing consumers to trace the origin of each precious gemstone. At this stage, the company is focusing their marketing efforts on promoting Zambian emeralds, that are less costly than the established Colombian gems. With this approach, Gemfields is looking to open a new market to consumers seeking an investment in emerald, that is more affordable.

These recent developments will certainly solidify Gemfields strong position in the colored gemstone marketplace. I feel that  the company has utilized their strengths in hard assets and marketing savvy, to put themselves in a leading position in an industry that grows steadily, as demand increases for a dwindling and/or limited supply of precious gems and gemstone investment opportunities.

Reasons to Invest in Hard Assets Like Investing in Diamonds

There are a lot of good reasons for private investors to invest in hard assets, especially in times of economic uncertainty. Hard assets can offer benefits that traditional investments cannot. For an investor who has a traditional portfolio filled with stocks and bonds, the addition of hard asset investments, can help to diversity an otherwise risky investment portfolio.

With hard asset investments there is also the opportunity for very competitive investment returns, when compared to traditional investing strategies; like stocks and bonds. As well, investing in hard assets has demonstrated that it can protect investments against inflation and economic uncertainty. For example, in the United States a certified deposit pays a rate of 2 percent interest, per year. This is far from the rate of inflation.

If included in the alternative investment portion of an investment portfolio, an investing strategy that includes hard assets, will dramatically improve an investor's risk-reward profile. And luckily for investors, there are many different approaches, which will allow them to invest in profitable hard assets. For example, there are many great reasons to invest in diamonds, other precious gemstones, certified coins; as well as gold, silver, platinum, and other rare metals.

Precious Gemstones Protect Against Inflation and Deflation

The primary influence of gemstone values today, is the fact that gemstones have reasserted themselves as the best form of money, the international community has been able to agree upon; in 5,000 years. For those who are cynical of investing in gemstones, this could be hard to believe, let alone accept. Nevertheless, precious gemstones have clearly demonstrated to the investment community, that their values can increase over time, in either an economy dominated by either inflation or deflation.

Investors must keep in mind, that what high inflation really means, is that the value of a currency is collapsing. All goods do not suddenly become more valuable, but rather the money we use to pay for these goods, begins to lose it's value. In most instances, high inflation is caused by excessive money-printing. So, it could be said that the reason why precious metal and gemstone investing has soared in value during high inflation, is because of the realization that paper money is neither rare, nor a store of value. In contrast, gemstone investments have demonstrated that they can consistently hold their value, resist the negative effects of inflation and protect an investment against an unforeseen drop in value.

With a gemstones standard, paper money must be at least partially redeemable in real bullion or gemstones. This requirement protects a currency in times of deflation — because people know that no matter how badly an economy sags that their money is backed by a dependable hard asset. With gemstone backing, currency is a secured asset. Without something like gemstones backing them, all paper currencies are nothing but unsecured IOU.  In other words, what happens is that there is a crisis of confidence with respect to paper currency, with the consequence being that people want to rid themselves of paper money, in favor of real money; like investing in diamonds and other precious gemstones.

Today, for the first time in history, the entire world is operating with purely fiat currencies. For those unfamiliar with the term, this means currency that only has value through a declaration (or fiat) by some government that it has some value. With that being said, anyone sitting with unsecured assets is going to be severely tempted to dump those assets, when a fear of insolvency arises. More specifically, it’s time to analyze how gemstone investments will react in the near future, as the inevitable bankruptcy of the United States and the never-ending political uncertainty in Europe becomes painfully obvious; to more and more private investors.

Adding Hard Assets is a Great Way to Diversify a Portfolio

Many investors believe that hard asset investments are meant to be enjoyed, held onto and later sold for a profit. Typically, the people who invest in diamonds or other precious gemstones, hold on to their investment until they can sell the hard assets; for more than the original purchase price.

One thing is for certain. When you adopt the mentality of diversifying your portfolio, you have created a buffer against a financial crisis, which can last over a relatively long period of time; and has proven to protect against inflation. Furthermore, it has been established that investing in a number of different asset classes will smooth out a portfolio's performance over time, as it can be expected that some assets will zig; while others may zag.

Many investors are surprised to learn that only hard assets have outperformed all other major asset classes, since the financial crisis. The investing lesson here is that diversification as a hedge works. Especially within a major asset class, such as gemstone investing and other hard assets.

Companies Make Money During Inflation And Investors Can Too

Even if stocks and other financial securities aren't performing well, gemstones tend to perform independently from other financial markets. Thus, gemstone investing is considered by many, to be a very safe investment.

Not to be overly cynical about equities, such as shares and options, but most investment firms today, are still able to make profits despite economic distress around the world. How? Even though inflation is being felt in many countries, companies have actually pushed through higher prices, creating increases on the cost of their end product. Therefore, during a inflation period, these companies have been selling their products for much higher prices; year after year. As such, their huge earning increases were not the result of improvements in productivity, but instead based purely upon the inflated market prices; they have been charging consumers for the goods they are selling.

So, rather than investing in the shares offered by one of these companies, why not purchase an asset you can own yourself, and enjoy a profit when other investments are affected by inflation? The best part of all, is that you will be able to find gemstones in varied sizes, for various prices, and the value of your gemstone investment (in most cases) will continue to grow; over the long term.

As Gems' Value Rises Currency moves Toward a Value of Zero

In a high-inflation environment, a currency moves gradually, but consistently; toward a value of zero. Similarly, in a solvency crisis, a currency can go to zero overnight. Thus, instead of a deflationary environment being bearish for gemstones, it is arguably even more bullish; than a high-inflation scenario.

Deflationary economic situations do not detract from the value of gems or similar hard assets and other fundamental stores of value. Consider this ... it is not an accident that the U.S government passed the Gold Reserve Act in 1934, taking control of all gold in the country, during the depths of the Great Depression – when the United States was suffering the worst deflation it has ever experienced, before or since. At that time, regulators reached the conclusion that they had no choice but to actually make it a criminal offence, for U.S citizens to own real money because of deflation; not inflation.

There are many commodities that will soar in value, as the wave of inflation caused by insanely reckless money-printing, leads to the worst global inflation; in at least three decades. Simultaneously, the U.S and a few other hopelessly insolvent economies are facing deflationary spirals, combined with high inflation for basic consumer goods, and the only asset class with fundamentals that can protect against inflation and deflation; are precious stones.

Country With 2nd Largest Population is Enamored by Diamonds

Without a doubt, the western middle-class is still ahead of its Chinese peers in some respects. For example, 25 percent of all U.S households made $75,000 or more in 2010. The number of comparable households in China today is about three percent. But these statistics don’t paint the whole picture, when compared to actual numbers. Imagine this. With 1.3 billion people in China, one must multiply any percentage by a factor of four to compare with the U.S. In simple terms, when only six percent of Chinese households earn $75,000 or more, their country will equal the U.S in terms of luxury spending power at a certain basic level. Upon reaching 12 percent, China will double the US in that ability.

Luxury spending in China is equivalent to, or even surpasses, such spending in the West; today. Therefore, logically, it’s possible that any consumption trend of the growing middle-class in China, will lead to them influencing or even controlling a given market; even before the projected middle-class growth numbers are achieved. This remains especially true, as the World’s second largest populated country becomes enamored with diamonds, and ignites the growing popularity of gemstone investing in Asia; and other parts of the World.

As the global markets recover, and countries like China and India continue to thrive and grow, there be new economic opportunities and the prosperity that results, will bring forth more investors; with increased motivation and spending power. With that being said, things have already come to pass as Lawrence Ma predicted in his speech, back in 2006. Although interest in diamonds is relatively new for the Chinese, who have typically gobbled up gold to secure their cash, more and more are seeing that investing in diamonds is a smart move; for the market's apprehensive and uncertain investors. In fact, even the World Gold Council recently announced that China is poised to become the world's largest gemstone and gold buyer in 2012, surpassing investors in the United States, Europe, and India.

Branding Can Provide Assurances When Investing in Diamonds

For the second year in a row, National Jeweler’s exclusive year-end survey showed that sales continue to rebound for retail jewellers, with 72 percent of respondents reporting gains in same-store sales in 2011. With all these positive development in the gemstone marketplace, most would agree that brand-intensive marketing is both necessary and desirable, however there is much disagreement as to whether it is only jewelry that should be branded; or whether a branded diamond is a viable option.

Over the last few years, there have been a number of significant efforts to brand diamonds, with the unique “Leo” and “Hearts on Fire;” being the most significant examples.  Nowadays, Industry experts believe that the De Beers’ “Forevermark” diamond, will become the new standard; for those investing in diamonds. Though being available for several years now on the world gems market, the De Beers’ “Forevermark” diamond is only being introduced in the United States; sometime at the end of this year. Furthermore, these precious gemstones will only be available, at a few hand-picked retailers.

All “Forevermark” diamonds are graded at the Forever Diamond Institute in Antwerp, Belgium, and according to De Beers, a “Forevermark” inscription indicates that the diamond has met the company’s standards; of assurance, quality and integrity. Each “Forevermark” diamond will have individual inscription on its table, with the “Forevermark” brand and identification number; using a patented technology. It has also been said that this inscription is invisible to the naked eye, as the actual inscription is only one-20th of a micron deep, and can only be seen using a special viewer; which is only available at authorized “Forevermark” jewellers.

Another Reason Investors are Investing in Gemstones

Looking for another reason to invest in gemstones? The increased market volatility of world economies and financial markets, will boost gemstones as a guardian and safe-haven; for your investment principle.

If we reflect upon the global turmoil that has followed investors since September 2008, volatility has become commonplace; in many international financial markets. This turmoil is pushing more investors toward the safety of gemstone investing, and driving up the prices of precious gems. The only associated risk with investing in gemstones, is related to the long-term outlook, for the global economy.

Regardless of political uncertainty, even if a currency investment remained flat, or even strengthen a bit; gemstones would continue to rise in value. Furthermore, the former Chairman of Princeton Economics International, recently speculated that investing in sapphire could rise sharply; beginning in October-November 2012. This will not occur as a reaction to rising inflation, but instead due to a general loss of confidence, in the United States government.

Despite Political Turmoil Gemstones Will Increase in Value

The situation remains extremely precarious and poses an unseen threat to the global financial market. Yet, you can still make money if you consider investing in alternative assets such as gemstones. Because gems often appreciate more, and are easier to liquidate, this is a smart investment strategy to consider;  in an increasingly uncertain economic environment.

As with any investment, investors must educate themselves and exercise a good deal of caution, and good old fashion common sense. As a rule, precious gemstones increase in value, at the rate of inflation. Of course, there are always exceptions. One good example is blue topaz, which used to be rare, and demanded a fine price. However, when the method of transforming common white topaz into blue topaz became available, the gemstone suffered a considerable drop in value. On the other hand, another notable exception is tanzanite. After the primary source closed, it skyrocketed in value. These examples represent exceptions to the rule. And therefore, unable to predict the future value of a gemstone, an investor's best strategy for investing in gemstones; is to buy them at the lowest price possible.

As a result of living in a globalized world, we sometimes end up paying for mistakes in judgement, that we did not personally commit; and had no immediate control over.The point I am trying to make, is that there is no reliable information available to assess the risk-return trade-offs, that traditional financial assets, such as stocks and heavily traded commodities possess; when their future is determined by political turmoil. When investors stop to consider this fact, some say that investing in diamonds is a wise investment, and deserves careful consideration.