Is Vintage Jewelry A Good Investment | Greg DeMark

Posted by Gregory DeMark on

 Collecting antique and vintage jewelry can offer many rewards but before I attempt to answer the question "Is Jewelry a good investment" I would like to point out that if your only goal of collecting, whether it be jewelry, coins, art or antiques is for financial gain than you most likely will be disappointed or not gain the full benefits of collecting.

  Most important collections are built for knowledge, prestige and personal fulfillment. If by chance a collection appreciates in value over time than all the better.

                                     

WHY SOME COLLECTORS FAIL

 

 

  As I mentioned in my article Creating your first jewelry collection some people are accumulators and not collectors. They never get past the stage of buying everything they can and often in box lot style.

  This method of buying rarely leads to creating an important jewelry collection and even if you are lucky enough to occasionally find a treasure, you need to factor into the value of that piece all the items purchased with little or no value. It is far better to find a knowledgeable dealer to work with that you trust and is willing to guide you to make smart choices. 

 Deciding what the purpose of your collection will be and narrowing your focus to items that tell a story about you as well as the collection can offer a far greater experience than just haphazardly making a purchase. Is your purpose to add a few pieces of modern or vintage Sterling Rings to help accessorize your wardrobe or did an interesting piece of Victorian jewelry pass down to you through the family that sparked your imagination.

  An example of one important collection I have had the pleasure to see built over the years started with a few stick pins that were handed down in the family through several generations. The sentimental value of those few pieces led to a collection that today has evolved with some stunning examples of figural stick pins that are becoming harder to find and therefore have increased in value.

  Another mistake is buying what is hot now.

   Most professional stock traders know that the time to sell a company is when everyone is talking about it. Yes, the price can and often does still move higher as new buyers rush to enter the market buying an overvalued stock at the top of the current market cycle, only to watch the price drop as the professionals move to the sidelines. Investing in a currently hot Jewelry, Antique or Art category could very likely carry the same result.

   If the only purpose of your collection was for financial gain than selling near the top of a market if you could identify it would be sensible but most serious collectors develop an emotional attachment to the items they have collected and therefore no amount of increase or decrease in value will encourage them to sell. I highly admire this type of individual for their devotion, for they are true collectors that put their heart and soul into building something that has meaning to them. For this individual, I highly recommend they slowdown adding pieces unless it is an important piece needed to round out the collection and wait for the market to change. It would be far better during these times to investigate an overlooked area and start building a new collection that interests you while you are waiting. 

 

HOW TO OVERCOME THE ODDS OF FAILURE

  

  There are six factors to consider that are necessary to give a collector any chance of success. 

  • Rarity:  Common items that where mass produced and readily available will always be common and rarely lead to sustainable financial appreciation. For the collector that builds their collection to use as a fashion accessory, the appreciated value is based on how those pieces make them feel and look with their wardrobe so this type of collection has built in value to the owner.

  Serious collectors look for items with enough supply to support the category but not so readily available that a large selection is available at any one time. An exception to this rule would be a rare and important collection entering the market that would possibly increase supply over the short term but then have the market readjust to a normal supply later.

 

  • Quality:  It is far better to buy a few items of high quality than a large group of lower quality examples.

  Filling in a collection with a few examples of medium to lower quality items that help round out a collection is acceptable but try to concentrate on the best examples you can afford.

 There is an old golf adage “You drive for show and you put for dough” that is very fitting here since an ample collection of low to medium quality items are for show and a Collection based on quality and rarity is for ………!

  

  • Condition:  Do not confuse condition with quality. Excellent condition describes an item that is completely original with no previous repairs or changes. Quality describes how well a piece is constructed.                                                                                                                                                                                                      

  On extremely rare or hard to find items some repairs may be acceptable to a collector if they were performed in a manner that keeps with the tradition of the item, using appropriate materials and done by a professional. Keep in mind that antique and vintage jewelry has been worn and loved by those that previously treasured the piece so some normal wear and tear may exist.

 

  An example of a repair that is acceptable is replacing a missing rose cut diamond in a Victorian ring and reset in a manner that blends in with the surrounding materials.

An unacceptable repair would be replacing this diamond with a modern cut stone, poorly set and easily detectible.

 Using a jeweler’s loupe, inspect a piece from all sides. To avoid buying a fantasy piece, constructed from parts of various pieces of jewelry, look for parts that have a different style, color or quality than the surrounding materials.

 

  • Demand:  The key here is to look for categories that historically have shown slow but steady increases in value and demand. These are items where new and seasoned collectors have continued to make investments to support the market without stripping the supply.                                                                                                                                                                                                                                    

 Items that show a quick and strong spike in value and demand often indicate an area to avoid or move out of temporarily or by liquidating items in your collection.

 A perfect example of an over blown market of an all too common item was the Beanie Baby craze. People stood in long lines and purchased huge quantities of this hot new collectible. Look around today and if you were compelled to you could buy these collections for pennies on the dollar.

 

  • Knowledge:  Become an expert in the area that interests you. Study every aspect of the category including but not limited to how to recognize fakes or reproductions from the originals, how the market has historically performed, how to determine what repairs or changes have been made to an item, what determines rarity as well as quality and how much demand is in the current market.                                                          
 The more you learn the better your chances of creating an important collection will be.

 

  • Value:  No dealer or individual can know everything about every area of a collecting field. Someone may specialize in mid-20th century designer costume jewelry and be an expert in this area but also have on hand a few Victorian rings. Do they have them priced high, low or at fair value?

 By becoming an expert yourself allows you to recognize a good value without having to rely on someone else to direct you with a purchase that may not be right for your collection. The better the value and the more important a piece is, the better your chances of success.

  

IN REVIEW

 

       “Is jewelry a good investment”?  There are no guarantees with any type of investment that you will make a financial profit and I am not suggesting that investing in antique and vintage jewelry will lead to a financial gain but you do have the chance to overcome the odds of failure by learning to recognize quality and value as well as trends.

 When a collecting category has shown a slow and steady increase over the years and then experiences a pullback followed by renewed interest it is time to pay attention.

 Learning to buy established collectibles at a fair value during the pullbacks and sell at the peaks sounds easy enough but truthfully requires experience and sound discipline.

 The real profit comes from the knowledge and enjoyment.

 

 

HAPPY COLLECTING!

 

 

For further reading you may like to read my article Creating Your First Jewelry Collection

 

 

 

To view our current selection of Antique, Vintage and Contemporary Jewelry please visit us at  www.gregdemark.com

 

 

Copyright: Greg DeMark – all rights reserved


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