These days, many people buy jewelry not only for fashion but also for investment. The common belief is that its value tends to increase over time. In reality, it’s not as simple as that. A person needs to know the real value of the piece, and the process itself can be complicated.
How to Know the Value of the Jewelry
There are many ways to determine the worth of jewelry. One of these is through grading. For example, if the necklace or the ring has a diamond, experts such as the Gemological Institute of America (GIA) will evaluate the stone based on the standards. These are the 4Cs: color, clarity, cut, and carat.
GIA then develops a diamond quality report according to its grading scale, which has become an industry standard. When it comes to color, a diamond can range from D to Z. Diamonds that fall between F and D are already colorless, but the rarest and perhaps the priciest is the D gemstone. There’s also a separate scale for clarity.
For those who want to know their monetary value, the only option is through an appraisal. It is a process where an expert in jewelry determines the numerical worth of it based on its intrinsic qualities and potential market price.
Kinds of Appraisals
Jewelry appraisals can vary according to the purpose. Take for example an assessment for reselling. The expert will have to determine the fair market value of the item. Also known as FMV, it is how much the buyers are willing to pay for the product.
FMV can change over time. Many factors can also affect it, such as defects. Two rose gold necklaces might have the same look and come from the same designer. If one of them has a broken clasp, though, the other might have a higher market value. After all, it’s easier to sell. For this reason, owners should fix their jewelry in Utah before they have the pieces assessed. Stores such as AAA Jewelers can help restore them into mint condition.
For those who want insurance coverage for the jewelry, the appraisal can be according to the replacement cost. It refers to how much one would likely spend to replace an old item with something new. It can be higher than the FMV, especially if the jewelry is still in good condition and it’s a collectible. Of course, it can also be cheaper, which happens when the piece tends to lose its value over time.
Appraisals are challenging for many reasons. One, there are no federal regulations or standards. The only guideline is not to over-value the item. Second, the appraisers can provide various values due to their training and knowledge.
Knowing the value of the jewelry, though, is an important process. It is especially necessary for individuals buying the pieces as an investment. The information can help them keep track of the value of their assets in the market. They can make a sounder financial decision. For example, if the piece’s value has a downward trend, they can sell it before they incur a significant loss. They can also find jewelry pieces that can truly appreciate over time.