Gemstones as an Intriguing Asset Class: Value, Challenges & Investment Solutions

4. December 2023

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Gemstones, with their timeless allure and intrinsic value, have long been regarded as fascinating possessions. Beyond their aesthetic appeal, these precious stones have also shown resilience, often having held their value in the face of economic fluctuations. As the relevance for diversifying investment portfolios grows, gemstones emerge as a unique and intriguing addition for investors seeking the potential for stability and long-term growth.

 However, despite the allure, venturing into the world of gemstone investments has historically been a challenging endeavor. The complexities involved in sourcing, evaluating, and managing the risks associated with gemstones have deterred many investors. The traditional barriers of entry, including steep costs and uncertainties, have restricted access to this promising asset class further.

Recognizing the untapped potential of gemstones as an alternative asset class, quantumrock has launched their latest product. This innovative investment solution aims to simplify, for the first time, the access to gemstone investments for professional investors.

Gemstones as an Intriguing Asset Class

Gemstones show a unique combination of scarcity, beauty, and durability, making them an attractive alternative investment. Unlike traditional assets, gemstones have been relatively resilient to economic downturns, and their intrinsic value can withstand market fluctuations. Investors seeking assets that can act as a hedge against inflation and economic uncertainties may want to turn to these hard assets. With a limited supply and growing global demand, natural gemstones present an intriguing avenue of diversifying one’s portfolio. Historically, these precious stones have demonstrated a capacity to preserve and increase value over time.

Traditional asset classes, such as treasury and corporate bonds, preferred stocks, gold, and real estate, yielded an average annual return ranging from 2,3% to 8,7% over a 36-year investment horizon data (Source). 

In contrast, gemstones have generally exhibited consistent and robust performance of the same period. Since 1995 the market prices for naturally coloured, untreated gemstones have at least tripled. Depending on the gemstone type, the market has witnessed annual average price increases of 5 – 8% (Source). Market experts note that particularly exceptional and rare rubies, sapphires, and emeralds, characterized by their quality criteria and origin, have experienced drastic value development over the years. For instance, rubies have shown an 8% increase, sapphires 6%, and emeralds 5% (Source). 

The current and future value of a gemstone hinges significantly on its rarity and quality. It’s widely acknowledged that the ‘Big 3’ – rubies, sapphires, and emeralds – are particularly well-suited for investment, whether in their loose form or incorporated into jewelry pieces (Source). Additionally, certain other gemstones, such as paraiba tourmaline, alexandrite, and demantoid garnets, exhibit enduring high market prices owing to their rarity and widespread appeal (Source).

 

The central area of the ring’s head is characterized by an oval, faceted design, showcasing the distinctive shimmer of emerald. Image Source: Omi Gems, Inc./Omi Privé 

The Challenges of Gemstone Investments

While gemstones show compelling attributes, navigating the intricacies of this market has proven to be a daunting task. The process of acquiring stones involves substantial risks and uncertainties, ranging from sourcing genuine gemstones to assessing their quality and potential market value.

Gemstones represent scarce natural wonders, each possessing its distinct characteristics. Drawing parallels with the art market, where every painting or sculpture is one-of-a-kind, the gemstone market shares a similar uniqueness. Unlike highly liquid assets such as gold or diamonds, gemstones and art lack daily reference values. Making informed decisions in purchasing and selling requires a certain level of knowledge and market access.

These challenges create a gap between the allure of gemstone investments and the practicalities of entering this complex market.

Unlocking the Potential of Gemstones: Introducing Rough Gemstone I

To overcome these challenges, quantumrock has introduced Rough Gemstone I, an innovative investment structure designed to streamline the gemstone investment process for professional investors.

Rough Gemstone I eliminates the traditional barriers to entry, allowing investors to invest in gemstones without the burdens of navigating the complexities associated with the gemstone market. 

Gemstone investments, once considered elusive and complex, are now within reach for professional investors, thanks to the introduction of Rough Gemstone I. This investment product not only simplifies the investment process but also adds a layer of transparency and expertise, making gemstone investments an attractive and viable option for those looking to diversify their portfolios with a touch of timeless elegance.

To learn more about the product please explore our website: https://www.quantumrock-rgs.com/ or watch the introductory video below.

Risk Notice

Please note, the intricacies of the gemstone market and other external influences introduce a level of uncertainty, making it crucial for investors to carefully analyse and assess these factors before making investment decisions. All the advantages of the presented opportunity are also offset by considerable risks, especially risk of loss. Please note, that past, backtested or predicted performance are not a reliable indicator of future performance. Please also be aware that the value of a polished gemstone is influenced by several key factors, such as its rarity, colour, clarity, cut, carat weight, origin, and market demand. Consequently, the value multiple estimations shown in this article are based on expert experience, and the actual results may vary significantly.

Dr. Stephan Hauska

Head of Sales
hauska@quantumrock.ai
+49 89 215 283 341

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