I am a faceter.  I check gemstone listings on eBay fairly often.  I see some sellers using the word "investment" on their stones.  I have some thoughts on this subject.  This is strictly my personal opinion.  Some people might not agree with me.  That is OK.  But it may be useful to someone who is considering gemstone investment.  That is why I am writing this guide.

Collection vs. Investment

Collection is repeatedly acquiring things of interest for enjoyment or as a hobby.  The purpose of collection is not necessarily making money.

On the other hand, the purpose of investment is making money.  It may be one stone or many stones.  But you pay to get it and plan to sell it later for profit.

• That makes me a collector rather than an investor.  Which are you?

Pros and Cons of Gemstone Investment

There are a few points to consider before you get into gemstone investment.

Pros

• Gemstones, especially investment quality stones, are beautiful and enjoyable by themselves.

• Portability and privacy.

• Not like real estate, there is no personal property tax.  But expect the insurance cost.

• They are permanent.  If you invest on company stocks, there is a chance that they lose much of value due to economic recession, poor performance or bankruptcy of the company, but not investment quality stones. 

Cons

• It is not cheap to begin with.  You cannot get an investment quality stone for $0.99. 

• It is not simple to find an investment quality stone.  You know it is not easy to pick stocks worth investing.  That is because there are tens of thousands of  companies that offer stocks, but you don't know which one is the best.  It is similar for gemstone investment.  There are so many stones available on the market.  On top of it, there are sellers who knowingly or unknowingly misrepresent a gemstone.

• It is not a short-term investment.  It takes many years, even generations, for the gem to appreciate.

• It is not easy to liquidate.  I have heard a story that three inherited colored diamonds (just around 1 carat each) sold for hundreds of thousand to near million dollars per piece at Christie's (a famous auction house) in the late1980s.  That is not a typical story.  Jewelers might buy a stone from you.  But it is usually less than the current wholesale price.

Maintaining Re-sell Value of a Gemstone

To make money, you have to sell a gemstone at a higher price than you got it.  In other words, the stone must appreciate quite a bit.  What makes the stone appreciate is its authenticity, quality and sometimes origin of the stone. 

No one will buy your stone at a significant price, I am talking about tens of thousand of dollars or more, if the authenticity and quality are questionable.  You must provide a solid proof of them. 

The only way you can do it is to accompany the stone with a grading report from internationally-recognized, independent gem laboratories, e.g. Gemological Institute of America (GIA) for diamonds, and the American Gemological Laboratory (AGL) or American Gem Trade Association (AGTA) for colored gemstones.  These reports should indicate the stone identity, type of or absence of treatment and quality (4Cs: cut, color, clarity and carat weight), and country of origin, if possible.  By the way, it applies, when you buy a gemstone.

Remember that majority of the stones on eBay from Thailand are man-made or fake or very low quality.  If you sell a stone that is not as stated, there will be a legal consequence, even if you did not know.  It is not feasible to make money by re-selling low quality stones.  It is a false hope that you get $0.99 stones and can re-sell them for $100 or even $5. 

• I have seen AGL reports that only certified the identity and size/carat weight of the gemstone.  Other aspects were omitted because they were "not requested" by the submitter.  Genuineness alone does not make a gemstone worth investing.  A genuine diamond can be an investment stone or industrial abrasive.  I cannot emphasize this enough: The stone must be of high quality and it must be documented.
• Do not accept appraisals and certificates generated by sellers or labs and appraisers associated with the sellers.  They usually overrate their stones.  Consider those appraisals and certificates worthless pieces of paper. 
• The reports from GIA, AGL and AGTA do not indicate monetary values.

Gemstones with Investment Potential 

After all things considered, if you are still interested in the gemstone investment, here is a list of stones with investment potential.  The followings are well-known stones, like blue chip companies.

• Alexandrite
• Chrysoberyl cat's eye
• Diamond including fancy colored
• Demantoid garnet
• Emerald especially from Muzo, Chivor or Cosquez in Colombia
• Jade especially from Burma (Myanmar) that is highly transparent and naturally pure green.  Currently banned by the US government (cf. the ruby section).
• Opal especially black opal from Lightening Ridge, Australia.  Watch for crazing/stability issues.  Need a proper care.
• Ruby especially from Mogok, Burma (Myanmar), not Mong Hsu, Burma.  Starting on September 28, 2008, the ruby and jade trade from Burma is banned by the US government: The Block Burmese JADE Act.  Even those cut in other countires and imported from there are prohibited.
• Sapphire including fancy colored & color change.  Blue sapphire specially from Kashmir.  Padparadscha from Sri Lanka, not Tanzania.
• Spinel especially from Burma, recently from Tanzania and Vietnam
• Tanzanite
• Tsavorite garnet

The followings are gemstones still new to the market, like promising start-up companies.

• Ethiopian opal.  Watch for crazing/stability issues.  Need a proper care.
• Chrome tourmaline.  Beware of the description "chrome color" tourmaline.  They refer only to color, not true chrome tourmaline. 
• Mali garnet a.k.a. Grandite garnet  Stones more than 2 carats are very rare.
• Paraiba tourmaline from Paraiba, Brazil or cuprian elbaite (Paraiba-type tourmaline) from Mozambique and Nigeria  Beware of the description "Paraiba color" tourmaline.  They refer only to color, not true Paraiba tourmaline.
• Spessartine/Spessartite garnet that is medium orange, not dark orangish red.

• I would not add andesine to this list.  The origin and identity of andesine are unclear.  There is no "andesine rough" available on the market.  The roughs of the above listed gemstones are very expensive, but certainly available.  I suspect the hype is entirely a hoax.

• As of July 08, Jewelry Television, which has been selling andesine as untreated, recently admitted a heat treatment on this stone (most likely a diffusion treatment with copper and iron), and offered a refund on returns for a short period.  The orignal color of these stones is yellow or clear.  They may be common labradorite mined in India and Mexico, not Tibet, Mongolia or the Congo as first advertised.  

In Summary, I Would Suggest You to...

• Do your homework on gemstones and their market prices.  Learn what is a high quality gemstone.  
• A note added in February, 2009: The 2009 Tucson Gem Show, one of the world lagest, trend setting gem shows, has just been over.  An interesting show report listed at www(dot)faceters(dot)com says the business in general was significantly down this year due to the bad economic situation, while the business in high quaility cut stones as well as high quality rough was booming for the investment purpose.  If you are interested, take a look replacing (dot) with .  and click  "New Stuff". 
• Work with a knowledgeable expert on your side, when you purchase a gemstone.
• Negotiate to pay less than the market price, or a near wholesale price, if you can.
• Do not buy a diamond without the GIA report.
• Do not buy a colored gemstone without the full report by AGL or AGTA.  GIA does not provide country of origin, which is sometimes very important when determining the stone value.  The price difference may be as much as 40%. 
• Buy the best you can afford.
• Allow time to appreciate and liquidate.
• Meanwhile, enjoy the stone.

My Concluding Thoughts

I saw an expensive sapphire listing on eBay that says "AGL cert."  When I took a careful look, "the cert." turned out to be produced by the seller's own lab.  The certification has to be provided by an independent lab.  The seller basically proved themselves deceptive.   

Nowadays various types of gemstone treatments make low grade stones look very nice.  It is difficult to determine the quality of a gemstone just by looking at pictures on the internet.  Together with those insufficient gem reports, I seriously think that eBay is not the place to buy your investment stone, no matter how many times sellers use the word "investment". 

For more information on colored gemstone treatments, click here to take a look at my other guide: A Quick Guide to Colored Gemstone Treatments.

This guide is updated from time to time, when more information becomes available.  If you learned something new and useful from this guide, please click "yes" below.  Thank you!