Before you read any more, please know that all investments involve different degrees of risk. You should be aware of your risk tolerance level and financial situations at all times. The following is my personal opinion, and you should research all and any investment before getting involved.

I have people ask me all the time whether gemstones are a good investment. This is like asking if investing in the stock market is a good investment. The answer is of course yes, no and maybe.

People have been especially interested in investing in gemstones since the stock market took a dive in late 2008, so I hope this is helpful for those of you who want to put some money into gemstones.

Why should you invest in gemstones? First off they have intrinsic value and have had intrinsic value for thousands of years, you don’t have to worry about trends in technology making them obsolete. Another good reason is that an emerald doesn’t go bankrupt, even if the value were to go down it won’t go to zero, even with the giant drop in the stock market a few months ago as of September 2009 the price of precious gemstones (Emerald, Ruby, Sapphire, Diamonds and Tanzanite) is currently at or above early 2008 levels, the downside of this is of course that you aren’t going to make 1000% on gemstones either as the price simply doesn’t fluctuate drastically like stocks do.

Who should invest in gemstones? Going back to the why, investment in gemstones is for people who want to put some of their money into a lower risk venture.

How much should you invest in gemstones? A good rule of thumb is between 5-10% of your portfolio.

What type of gemstones should you invest in? It is strictly my opinion that color gemstones are your best investment, the reason for this is that they do have a better chance of an upside potential than diamonds do and because diamonds are completely commoditized with a list setting the price.

The best color gemstones to invest in are obviously the popular ones, Parisite may be a very rare gem, but there is little demand for it so when it comes time to liquidate your gemstones for cash you may not be able to find a buyer. Emerald, Ruby, Sapphire, Tanzanite, Tourmaline, Amethyst, Alexandrite, Topaz and Aquamarine for example are great stones to invest in. Why? Because everybody knows what they are.

The next question is quality, make a point of buying mid range quality gemstones at the lowest up to high grade gemstones. You do not want to buy the highest grade though because again you are looking for gems that are readily marketable, a single emerald worth $10,000 is not as easy to move as 10 emeralds worth $1000 each.

Something that people have also often asked me is 'where do I sell the gems when I want to liquidate them' The answer is that similarly to art most investment gemstones are sold through physical auction houses.

All that said, I encourage you to do a lot of independent research into investing in gemstones before you start.

Best of Luck
David Saad