A fashion statement, a gift for a loved one or a family heirloom bridging the gaps between generations are the most common things people associate jewelry with nowadays. However, what few realize is that jewelry made from precious metals can also constitute a good investment and represent a safe option in terms of diversifying your portfolio.

Due to inflation and volatile markets, money tends to lose value over time. At the same time, luxury goods such as cars and clothing are bound to go out of style and therefore, depreciate. On the other hand, jewels and particularly those fashioned from gold, silver and platinum, will always carry value in their own rights. In short, they have an intrinsic worth. Let’s explore the types of jewelry that make decent investments and have a growth potential.

• Gold jewelry

Because long-term investors have been able to benefit from a .43% return rate for more than 30 years, gold is by far the safest and most stable investment you could engage in. Then again, take note that the aforementioned numbers apply to gold in general and not the jewelry made of this precious metal. For gold jewelry to be a good investment with great return, the piece must have a minimum of 18 karats.

If you’re looking to make a profit, then you must keep an eye on the price of gold and determine the best time to sell. In addition, you should avoid purchasing the piece from a retail store, as these establishments sell them for as much as 300% above the market value of the materials.

• Jewels with diamonds

Despite the popular belief that diamonds are forever, a smart investor knows that, when it comes to jewelry, the trends come and go. Therefore, in order to turn a profit from your newest diamond piece, it is highly advisable to avoid acquiring items with trendy cuts, particularly those featuring heart or marquise shapes. With diamonds, your only concern should be the resale value. The safest approach is to purchase a piece with a single stone. For instance, a ring or a necklace that features a round brilliant cut diamond is a classic and carries the best long-term value.

• Estate jewelry

Given the growing popularity of antique and vintage pieces, it was just a matter of time before estate jewelry grabbed the attention of investors. However, similar to diamonds, steering clear of trendy styles ensures that your jewel has the resale and value actually turn a profit. In general, it is best to inquire whether the stone is original before purchasing, considering that most dealers will only pay the intrinsic value for your jewelry.

A word of advice

Although the precious metal they are made from holds value, recently manufactured jewelry costs became inflated due to labor expenses and retail fees. If you’re looking to purchase jewelry for investment purposes, then you should do your homeowner and learn about the updated values of the precious metal before buying. To put it simply, not only do you have to verify that you’re acquiring the perfect accessory, but also that the piece is an investment with potential for growth.