So you want to invest in gems…

Frequently we are asked about how to invest in gemstones.  Our standard answer is that same way as you would invest in any other commodity –buy it cheap and sell it for more than your cost.  This is often not so simple of a task. 

Here at NEGS we have been reasonably successful at buying product at attractive wholesale prices.  Typically we accomplish this by going overseas and dealing directly with mining operators or cutting factories.  We also buy in quantity. 

The second half of that investment strategy is to sell for more that it cost.  For us that involves having an office and staff, doing several trade show a year, and offering value added service such as building jewelry to hold you gemstone.  For us, this is a full time business, taking 40+ hours a week if we’re lucky.

If you want to try you hand at making money dealing in gems. We offer this advice.  Concerning buying, your lowest prices will likely be offered by wholesalers and not from retail stores. In addition, you will get a better price by purchasing lots of stones rather than single stones.

You may also be able to run across gems at tag sales or flea markets, pawnshops and estate sales. Sometimes you can find gems considerably below current values. However, you must have the expertise to identify gems, be able to distinguish between natural and synthetic stones, and be prepared to do a lot of legwork.

Selling the gems for a profit is the second, and more difficult part of this process. Jewelry stores are a possible place to sell your gems, as are auction houses and online auctions. Note that, unless you own a business, you are not likely to get a retail price.  If you have weak sales skills, you should not invest in gems.

One last point of warning, if someone tells you a specific gem is a good investment, and that individual does not have a Series Seven License and is a registered investment advisor, they are in violation of The Securities and Exchange Commission laws, and subject to arrest. 

Buy your gems to own and enjoy.  Buy quality, buy at competitive prices.  Hopefully, when you want to sell your gems you will be able to find a willing buyer and make a buck.  However, if you want to make a real living in this trade, expect that it will probably only happen if you turn this hobby into a full time job.  Good luck.
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The Gem Guys
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