Marilyn Monroe’s famous saying is just as relevant today. As a result of international sanctions in response to the invasion of Ukraine, Putin has severely restricted the movement of cash outside the country. And the Russian elite have “fled” to what still looks like a relatively good investment: luxury jewellery stores.
Panicked by the financial meltdown, many of the country’s wealthy are investing small fortunes in luxury jewellery and watches, which, despite the continuing fall in the value of the rouble, may still command high resale prices in the future. As with gold, which holds its value relatively well and can therefore serve as a hedge against inflation, luxury watches and jewellery can retain their value and even increase in price in the midst of economic turmoil caused by war and conflict. But the Russian oligarchs have had to hurry, as luxury brands, like the biggest brands, are closing down their outlets. To name but a few: LVMH has suspended sales in 124 of its stores (3,500 employees are still in question), Rolex has also pulled out, but the Swatch Group and Hermès have also made similar decisions.
How good an investment is jewellery these days? It may surprise some people to learn that over the past ten years jewellery investments have outperformed US equities, New York property and gold. Investing in jewellery is much closer to investing in fine art than, for example, investing in real estate. If you are thinking specifically in the longer term, you can do very well indeed. Year after year, it is becoming more and more common for serious investors to devote some of their options to investment-quality jewellery.
But let’s look specifically at the types of jewellery that are now a sure-fire investment in this market! One of the biggest success stories in 2021 was jewellery made from natural saltwater pearls – which are likely to grow in popularity in 2022 – as they are very rare and hard to find. Nevertheless, pearl diving is a very dangerous profession, and very few people practise it today. Most of the natural saltwater pearls available on the market are over a hundred years old and are usually found in equally rare antique jewellery. Consequently, the price of these pieces is set to skyrocket even further and will continue to do so in the years to come.
The other big hit is coloured diamonds. According to the GIA, white diamonds are graded on a scale from D to Z, where D indicates that the diamond is colourless “white” and Z indicates that the diamond is yellowish. The diamond’s value decreases the more intense the colour. But there is a twist: coloured diamonds! Like natural saltwater pearls, they are very rare, with only one in 10 000 diamonds having a desirable colour. The famous CTF Pink Star was named the world’s most expensive gemstone in 2017. The pink diamond was sold at auction in Hong Kong for $71.2 million.
Many people love sapphires even more than diamonds. High-quality Kashmir sapphires are one of the jewellery industry’s most important investments. Sapphires range in colour from all shades of blue to orange and yellow. But the finest blues come from the Kashmir region of the Indian subcontinent, and there are only a handful of collectors in the world who trade in gem-quality Kashmir sapphires. These sapphires are considered the crème de la crème in the world of sapphire investors. Their rarity makes them one of the highest investment rates in the jewellery world today.