Gems or Gemstones, like other commodities, are subject to their value rising and falling over certain periods of time. As an example, people can buy a certain gemstone during one part of the year and immediately sell off their assets once the price rises. Thanks to that, precious gems are a great investment option for first serious value investors.
In today’s volatile financial markets, top-quality hard assets have become increasingly attractive as safe stores of value. Between 2001 and today, stock prices are up about 30 percent. Diamonds, however—at least certain huge diamonds – have done far better.
Sotheby’s yesterday sold a 74.79 carat white diamond for $14.2 million, far above the pre-sale estimate of $9 million to $12 million. Five bidders were vying for the unnamed rock, which has a coveted “D” color designation. Sotheby’s says the same diamond sold in 2001 for $4.3 million, meaning the value more than tripled and provided an annual return of more than 20 percent.
Why invest offshore?
Offshore investing is a smart and safe investment strategy. Storing certain assets offshore allows an investor to capitalize on advantages offered at financial institutions outside one country. Sometimes, an investor’s home country may not offer enough desirable advantages, such as asset protection from frivolous lawsuits, for their financial security. Instead of finding an onshore alternative, they seek an offshore institution to handle their investments.
The advantages to using offshore investing are rather simple to understand. Some example advantages include:
- Tax incentives, such as capital gains tax reductions. Some foreign countries are known for offering better tax rates, making them rather attractive locations for investors. Many countries, however, are tightening up on the use of these perks.
- Protecting investments, such as commodities and assets. It’s self-explanatory. Sometimes, an investor may want to protect their asset and collectibles from legal troubles, financial troubles and even personal issues. Offshore institutions are popular places for people to relocate portions of their assets for ownership restructuring.
- Geo-diversifying their investments. Some countries restrict the type of investments they can add into their retirement investment portfolios. Investing offshore helps them get around those restrictions to truly geo-diversify their portfolios.
Why use precious gemstones as offshore investments?
Precious gemstones, especially higher quality gemstones, make excellent investments. As an example, diamonds always hold some kind of value, particularly when their quality is the purest form available.
The quality, in fact, drives the prices of many precious gems to favorable prices, which encourages some people to sell their investments for profit. Having an inventory of precious gemstone investments prepares most investors for prime selling ‘seasons,’ as they already have a precious gems stock to draw upon when market conditions are right.
Gemstones are also subject to supply and demand. The rarer the gem, the more likely its corresponding price will rise over time. Some of the highest quality gems are available in limited quantities, while lower quality gems have high supplies. You can potentially protect gemstone investments by storing them in an offshore account, in the case of a legal or financial threat to your portfolio/assets.
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