A shiny investment

"Forget about it" is Francois Curiel’s response to anyone buying jewellery purely as an investment. “If someone came to me and said ‘I want to spend $10K and don’t really care what I buy, please tell me what is a good buy’, I would say ‘Sorry, I can’t!’ In jewellery, the driver has got to be you. We should leave the investment to the professionals in real estate or stocks and bonds,” says Curiel, chairman of Christie’s Europe, and the international head of the Christie’s jewellery department.

At Sotheby’s, senior specialist Joanna Hardy won’t even use the word ‘investment’ and ‘jewellery’ in the same sentence. “Jewellery is not a commodity,” explains Hardy, who has worked in the industry for 30 years. “It’s an art form and an emotional asset you should buy to get pleasure out of now.”

“Jewellery may not reach the heady heights of a Monet or a Bacon but when other markets are a little unsettled, it does tend to ride high.”

And yet, in this economic climate, where investment portfolios have been sliced, the art world has held strong. Alongside art, people have turned to other, ‘safer’ tangible assets as investments, including gold, antiques and fine wines. Is the same not true of jewellery?

Both are cautious. Although diamonds are 30 per cent cheaper than they were this time last year, they are 20 per cent more expensive than this time three years ago, so the market’s next move is difficult to call. Both do concede, however, that jewellery is always a worthwhile buy.

“It may not reach the heady heights of a Monet or a Bacon but when other markets are a little unsettled, it does tend to ride high,” says Hardy. Meanwhile, Curiel accepts it is an ‘important portable currency’. “It can move quickly from one country to another, so add this to the beauty of it, and it’s very valuable in these troubled times.”

But neither will budge on the ‘investment’ issue. They do, though, agree on ‘buying the best you can buy’ when it comes to spending on jewellery. So how does one do that? Along with ultimately following your gut instinct, the following advice can certainly help.

Research
Read up on what you might like before going along to an auction. Taking sapphires as an example, Francois Curiel explains: “You’ll learn there are sapphires from India, Sri Lanka, Africa, Thailand and other countries like America, each with their own type, colour and size. I probably wouldn’t buy anything at my first auction, just see what happens and compare prices with estimates. Then start buying at the second.”

The stone
A stone’s value is determined by the sum total of the four Cs – Carat, Colour, Clarity and Cut.
• Carat - the heavier the stone, the more valuable it is. One gram equals five carats in weight and it takes 250 tons of mined material to yield a single one-carat diamond. Three carat diamonds are now extremely rare.
• Colour - D colour is the most valuable white diamond. ‘Fancy vivid’ is the most valuable colour diamond.
• Clarity – refers to the purity of the diamond. The higher the clarity, the higher its value.
• Cut – determines the sparkle. The more facets, the more sparkle a diamond has. This doesn’t determine price. For optimum value, the stone should neither be too thick or too thin.

Manufacture and quality
Mounting has a huge impact on a piece’s value. “If jewellery is well made, it will do well in value,” Hardy says simply, adding “if the piece has no design content, just diamonds in a very simple claw mount, it may then warrant a price per carat for the diamond and weight of gold added together.” Also, if the designer has signed the piece, it impacts the jewellery’s value, especially if the designer is well known.

“Rarity is what’s always in demand, and diamonds are genuinely rare. The earth is not just going to produce another blue diamond or natural pearl when you want it.”

Rarity is the key
Rarity is the key in the purchase value of jewellery. “It’s what’s always in demand,” explains Hardy. “And diamonds are genuinely rare. The earth is not going to produce a blue diamond when you want it. And the world is too polluted to get natural pearls. Where else will find you these?” Similarly, if a jeweller dies, there are only a limited number of their pieces to buy which instantly makes them rare. Provenance (history of ownership) is also a factor. A $5 two-row plastic pearl necklace was sold at Sotheby’s for $200,000 because it once belonged to Jackie Onassis. “That person wanted a part of what she was about. You can’t put money on that,” she says.

Old isn’t always gold
While rarity is in demand, antique jewellery isn’t always the best buy. Jewellery pieces today are the antiques of tomorrow. So, it’s worth taking into consideration the mounting and design along with your emotions once again. But even with these points taken on board, people’s emotions still tend to win out in the end. In his 40-year experience, Curiel has seen ‘no magic formula’ when it comes to price. “No computer can compute it, it’s down to how much you like it, whether you look at the piece and it speaks to you and it says ‘I cannot not have it’,” he laughs.

Hardy agrees. At auctions, she says: “You can have two people who really want a piece and they’re adamant that they’re not going to let the other one have it. So the price can go up and up.”

But invest some time and effort into your jewellery buys and it does then to pay off. “Spend £3,000 on a handbag,” Hardy admits, “and it’s not going to retain its value in two or three years’ time. A good piece of jewellery will stay at that value and not lose it.”

Curiel agrees. “If you buy jewellery without being obsessed with the investment value, and you keep it long enough and bought it well, you probably make a good investment. But it shouldn’t be your primary motive.”

Christie’s London jewellery auctions take place on 10 and 17 June. See www.christies.com or call 020 7389 2383 for more details.

Sotheby’s Fine Jewels auction takes place on 16 July in London. For more information, see  www.sothebys.com or call Joanna Hardy on 020 7293 5310.

By Barbara Walshe