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The Unfounded Belief that Jewelry should retain its original Value

The Unfounded Belief that Jewelry should retain its original Value

Posted by Guy Michael Smith on 27th Mar 2020

I'm not exactly sure why Consumers think that Jewelry is supposed to Retain its Original Value when nothing else we purchase will. For the sake of this Article, the word Value represents the Original Retail Price paid for an item.

Diamonds are the most Opulent, Luxurious Article that most will ever own. They are your Daytime North Star, The most Beautiful sparkle on Earth, which causes their appeal.

Of all the things we buy in our lifetime, nothing has real Value like Gold, Platinum, and Silver. These precious metals are: sought after and traded commodities with an actual market value as raw metal, which also functions as the foundation for Jewelry.

Like all other industries, Retail Pricing represents:
• Jewelry's cost,
• The selling of Jewelry,
• The employee's livelihood,
• The business owner's expenses,
• The business owner's profit.

Additional costs that add to the finished price of Jewelry are:
• Mining, Cutting, and Producing of Diamonds and Gemstones.
• Mining, Refining, and Casting of Precious Metals.
All of these costs are the reason for Jewelry's Retail Price.

Anyone who believes that 99.9% of Jewelry purchased is as an Investment is not a reasonable belief.

• An Investment, by definition, will, at the very Minimum, Maintain and Increase in Value.
• There are no consumer goods, including Jewelry, that increase in Value. There are very few exceptions to this rule.
• Most of all Luxury goods/brands hold some Value, although not nearly its Original Value.

ladies-piaget-nightwatch-from-the-1980-s-retailed-for-75-000-sold-for-16-000-at-auction-860x727.jpgThis 20th Century, Ladies Piaget Nightwatch, Retailed in 1985 for $75,000 USD. The 2019 Auction Price was $16,000 USD, less than 20 percent of its Original Value.

I am not saying, based on the Value Test, You should not buy Jewelry. I am saying that choosing to spend Money on Jewelry, your expectation of Value should remain the same as any other Depreciating Asset that you own:
• Automobiles, Recreational Vehicles, and Watercraft,
• Contents of your Home, Furnishings, and Designer Clothing,
• Collectibles, Art, Heirlooms, Antiques,
• And Finally, Your Jewelry.

Most Real Estate being the Exception, only the best Cared for items may resell for a Portion of its Original Retail Value.

Think about your own home; when the time comes to sell, you will not recoup all the effort and expense that went into its upkeep.
• Mortgage Interest
• Property Tax
• Painting and Re-roofing
• Cleaning
• Renovations
All these expenses and maintenance items will add up to a lot of Money. Will all these costs be recouped in your home's sell price? Speaking as a homeowner, I think not!


Guy Michael