Emeralds vs Precious Metals Investment

[greensarb]

I am new to emeralds. I have a fairly strong physical gold/silver stack, and that's an area I am more comfortable with. But I was wondering about diversifying into buying some Colombian emeralds.

Do people invest in emeralds compared to other physical assets? I wonder how it would compare to gold/silver, or the pros/cons of investing in emeralds?

 

[kenny]

Gems are NOT a good investment.
Unlike gold gems are not a commodity.
Gold has a universally agreed-to daily price that everyone buys and sells at, plus a relatively small commission.

When buying gems we have to pay retail, but then to sell we must settle for wholesale.
If retail is double wholesale you have to wait for values to double just to break even.
So much for the "investment".

Buy gems only if you love them.

 

[LilAlex]

I am new to emeralds. I have a fairly strong physical gold/silver stack, and that's an area I am more comfortable with. But I was wondering about diversifying into buying some Colombian emeralds.

There is no "spot price" for emeralds and the bid-ask spread, as @kenny points out above, is enormous. As a retail customer, you will pay 4X what you can sell for. That is a huge hole to dig yourself out of, in terms of investment returns. Moreover, the most knowledgeable people in the whole world -- with respect to the emerald market -- are willing to sell them to you right now. If they know way more than you do, why do they not just "invest in them" and sell for a huge profit next year or ten years from now...? Why do you know something that they do not...?

I won't even get into the weeds over how you even know you are buying top-quality emeralds (vs. gold, where you do not need to know one thing about how to choose the "superb" one-ounce gold coin that is worth 100X more than the seemingly identical-looking one-ounce gold coin)

Gold is not an investment; it is a hedge. (An ounce of gold will alway be an ounce of gold; it will not turn into two then four then eight ounces of gold, no matter how long you hold it.) Some commodities are on a tear now thanks to war and inflation; however, they tanked with COVID and have been the worst-lagging asset class for a decade. Google "Callan Periodic Table of Investment Returns" to see what I mean.

Since you are investing in physical silver, I infer that you do not have a lot of money -- unless you have a special reinforced silver bullion room. (At $300/lb, even a literal ton of silver is not a big emerald budget; it is a single top-notch unoiled 10-ct stone advertised on the muzoemeralds IG today!) So with that in mind, please make sure that you familiarize yourself with other investment options and investment ideas and read and talk to people outside your area of interest and expertise. Please compare your recent/past success to that of other asset classes. For example, I bought a sapphire or two ten years ago and they have more than doubled in value! But my money in the dumb ol' S&P500 has quadrupled in that time frame. My house has nearly tripled in value over the past 25+ years (!) -- but the same dollars invested in the S&P500 would have increased 12X over the past 25 years. It's time in the market, not timing the market.

You need a high probability of success -- and most people (in the US) with that objective invest in the total US stock and total US bond markets in 90:10 to 25:75 ratio, depending upon wealth, age, and risk-tolerance. Many would put up to 10% of the total in so-called alternatives -- like gold, real estate, crypto, Star Wars action figures, etc. I suppose emeralds could go in that last bucket.

Good luck with whatever you choose!

 

[lambskin]

Sort of an on topic question. If gems can be man made why can’t gold? I remember my biology and chemistry classes wherein we discussed alchemy, fools gold and lab Created gems In the 1970s. But with technology rapidly advancing is it possible to create gold? I ask as lab made gems and diamonds are sold at a price below the mined real deal and the future impact upon mined gems’ value is unknown.

 

[lilmosun]

Sort of an on topic question. If gems can be man made why can’t gold? I remember my biology and chemistry classes wherein we discussed alchemy, fools gold and lab Created gems In the 1970s. But with technology rapidly advancing is it possible to create gold? I ask as lab made gems and diamonds are sold at a price below the mined real deal and the future impact upon mined gems’ value is unknown.

It can be but would cost more to make than the value of gold itself.

 

[Daisys and Diamonds]

I think it would be so cool to own a silver bar
i wonder how heavy it is ?
Many years ago i saw a gold pour at a South African gold mine
we wernt allowed to take photos but they wheeled out a gold bar on a trolley and let us touch it
if we could pick it up with one hand they said we could keep it

it weighed 26 kg
and it felt like heaven

 

[LilAlex]

If gems can be man made why can’t gold? I remember my biology and chemistry classes wherein we discussed alchemy, fools gold and lab Created gems In the 1970s. But with technology rapidly advancing is it possible to create gold?

Gold is an element. Changing an element into another element involves nuclear chemistry -- very different from regular ol' inorganic chemistry that is used to make corundum, for example. In that instance, the elements are not themselves changed; they are just joined together to make new compounds. But the individual atoms (elements) can still be separated out under the right conditions. Even lab-created diamond is "just" changing one form of carbon (an element) into another form of carbon using pressure and (presumably?) temperature. And time.

I don't know of any nonradioactive element that has been synthesized in any quantity via nuclear chemistry. Earth's gold all came from the interiors of old stars; it was not even made on earth. It is not very reactive so it is often found in nature as the pure element, gold. That's part of what makes it so great for jewelry -- i.e., it doesn't rust.

 

[lambskin]

Thank you LilAlex! Where were you when I struggled with my sciences! Your explanation was amazing!

 

[kenny]

Thank you LilAlex! Where were you when I struggled with my sciences! Your explanation was amazing!

I admire smart people who think and communicate well, like LilAlex.