The Best Gems to Own

STORE OF VALUE refers to the strategy of placing a portion of our wealth into something that has enduring value.  Typically, people think of gold, silver, or real estate.  However, gems are a truly stable way to hold wealth that is always a constant value. When the stock market is declining, real estate in trouble, and currency is losing value, gemstones tend to be a reliable store of value that is also compact, portable and private.

Though gemstones are not as liquid as gold, a high quality Burmese ruby or Ceylon sapphire will always retain its value. New discoveries, like the valuable neon spinel discovered in Mahenge, Tanzania in 2007, provide new opportunities for collectors. But in general, the world demand for fine gemstones far exceeds the supply, and gemstone prices mainly move upward over time.

This NASDAQ chart shows the value growth trend for various assets, including precious gems:  (Click the chart to find the NASDAQ report)

Any high quality gem may be worthy of investment. But based on our years in the trade, here is our list of the top 10 investment gems.

1. Ruby

 Fine ruby is the rarest of all colored gems, and Burmese ruby has long been the premier investment gem. Fine unheated Burmese rubies in larger sizes draw prices as high as $300,000 to $400,000 a carat at auction. Vivid red -- a color known in the trade as pigeon's blood -- is the most valuable color. Rubies tend to have inclusions, so color is more important than perfect clarity.

Rubies are in the same family as sapphires, but only the truest red color qualify a stone as a ruby.  Of the colors, the pigeon blood color is considered the most prized and quite rare.

Burma and Miramar rubies are by far the most valuable, but fine unheated rubies from other locations -- Madagascar, Mozambique and Tanzania -- are rapidly increasing in value.

2. Blue Sapphire

Sapphires are the second hardest stone in the Mohs scale and they are scarce, so the prices are always impressive.  Based on sales from the top auction houses, blue sapphire is the second most popular colored stone for investment.  Sapphires are some of the most beautiful gems in the world and are in demand for jewelry as well as wise investors.

The rarest sapphires are from Kashmir, but no new material has been mined there in more than 100 years. Next most valuable is Burma sapphire, followed by Ceylon (now Sri Lanka) and Madagascar. Fancy color sapphires -- yellow, pink and padpardascha -- are now popular with investors as well.

3. Emerald

Emerald are in the top four of precious gems.  It is nearly impossible to go wrong by owning quality emeralds.  Larger emeralds are actually worth more than small emeralds from an investment perspective.  The reason is the larger, quality gems are far more rare and command a much higher per carat valuation.

The emerald market has seen some turmoil as a result of controversies over treatments with artificial resins, but fine untreated emeralds continue to be reliable investments.

Colombian, especially in large sizes, continue to be the most valuable, followed by the top Brazilian emeralds. Some high quality emeralds are also mined in Zambia. Investment grade emeralds must be untreated.

4. Spinel

Spinel is is a cubic crystal system.  They are beautiful and a rival to rubies without the expense.  Spinel is now representative of the month of August along with Peridot and Sardonyx.  Red is the most popular color of spinel, but other colors are equally attractive, such as Black, Blue, Green, Red, Yellow, Pink, White, Purple, Orange, Brown

Spinel is a relative newcomer as an investment gem, but in fact some of the most famous rubies in the world, such as the the Black Prince's ruby in the British Crown Jewels, are actually spinels.

The most valuable spinel colors are red, hot pink and flame orange. Red Burmese spinels and the neon pink-red spinels from Mahenge, Tanzania have the best investment potential. Spinel is completely untreated and prices on fine pieces have risen significantly in the last 5 years.

6. Spessartite Garnet

Not everyone can afford the major gems like ruby, emerald, or sapphires.  There are a few specialty types of gems that are great values, very beautiful and are considered investment grade gems. 

Garnets are not generally consider an investment gem, but there are some varieties that stand out as extraordinary as well as rare specimens.  Spessartite Garnet is a bright orange garnet colored by manganese. The finest examples, often referred to as Mandarin Garnet in the trade, are a pure orange that is one of the most vivid colors in the gemstone world. 

The pure orange specimens are very rare, and come mainly from Africa, particularly Nigeria and Namibia. Large clean stones are quite valuable and display remarkable brilliance. 

7. Alexandrite

One of the lesser known but very rare gems is Alexandrite.  Alexandrite is a rare chrysoberyl that is popular with collectors for its striking color change and excellent hardness (8.5 on the Mohs scale).  This is the color changing gem that is an emerald color in the light and ruby color in the evening.  The beauty and vitreous display makes this gems a constant charm.

Alexandrite was first discovered in Russia and Russian specimens are very rare and valuable. Today the highest quality alexandrite comes from Brazil, with medium grade material from Tanzania.

8. Jadeite Jade

Fine translucent emerald-green jadeite is known as Imperial Jade. This rare gem is found only in Burma (Myanmar) and is coveted by collectors around the world, especially in Asia.

Type A jadeite is untreated natural Burmese jadeite where the color is 100% natural. Only certified jadeite of this quality is deemed worthy of investment

9. Imperial Topaz

The Ouro Prêto area in Minas Gerais is the source of the rarest topaz known as imperial topaz. This topaz is golden-orange to orange to pink, pinkish-red or violet in color.

The color should be completely natural, with no enhancement by heat or other methods. Stones with a hint of pink or red are the most valuable, with a pure red natural topaz counting as extraordinary.

10. Paraiba Tourmaline

Paraiba tourmaline is a rare copper-bearing variety of tourmaline with a distinctive neon-like glow. It was first discovered in the Brazilian state of Paraiba in 1989. Since then small deposits have been found in Nigeria and Mozambique

The Brazilian paraiba is still the most valuable, but color and clarity are more important than origin for these rare gems. Clean paraiba tourmalines with exceptionally vivid color are the most valuable.

These are not the only investment grade gem varieties, by any means. Top specimens of nearly every gem type are collectible. But the harder and most beautiful gems tend to do best as investments. In addition to the 10 varieties listed above, we would also mention Tanzanite, Demantoid Garnet, Aquamarine, Purple Garnet, Blue Tourmaline and Rubellite Tourmaline.

When buying gemstones for investment purposes, it is critical to buy top grade gems. Low cost commercial grade stones are essentially worthless: they suffer from mediocre color or clarity, and are typically poorly cut, lacking brilliance and fire. Fine gemstones are distinguished by vivid, intense color, outstanding clarity, and excellent cut. Buy the best you can afford, always keeping in mind that this is money not spent, but rather invested.