Building a Coloured Gemstone Collection: A Ten-Year Plan

Most collections start by accident: a stone bought on a trip, a ring inherited, a dealer who was persuasive at dinner. The ones that hold value over decades were built the other way round, from a plan written before the first purchase. I have advised on both kinds. The accidental ones are more charming and worth less. This is the plan I would give a client who asked me how to build a coloured gemstone collection over ten years, with an honest accounting of what stones can and cannot do as assets.

Decide what the collection is for

Three answers, and they lead to three different collections. To wear: then the stones are chosen for the hand and the room, set into pieces, and the collection is judged by pleasure. To hold: then the stones stay loose, the paper leads, and the collection is judged at resale. To pass on: then the file matters as much as the stone, and the collection is judged by whether the next keeper can prove what they own. Most clients want some of each. Say which wins when they conflict, because they will. I have written honestly about whether coloured stones are an investment; the short version is that they are a store of value with no yield, a wide spread and slow liquidity, and a collection built as if they were shares will disappoint.

Fewer, better

The market pays for the top of every category and forgets the middle. A two-carat ruby of superb colour will find a buyer in any decade; a two-carat ruby of good colour competes with ten thousand others. So the first rule is arithmetic: one exceptional stone rather than five good ones at the same money. This is harder than it sounds, because five stones feel like progress and one feels like waiting. The collectors I respect most bought slowly and refused often, and they own fewer stones than their friends and more value.

Unheated at the core

The core of a collection that will be held should be stones whose treatment line reads no indications of heating, and emerald only at insignificant or minor oil. The unheated premium is real and it is the part of the price that has appreciated fastest for thirty years, because the supply of certified unheated material shrinks every season while the demand for proof grows. What unheated means and costs is set out elsewhere. For a wearing collection the rule can relax; for a holding collection it cannot.

Origin as the option

Origin is an opinion the laboratory forms and the market prices. Burmese ruby, Kashmir sapphire, Colombian emerald: each carries a premium over the same stone from elsewhere, and the premium has historically widened at the top. Treat it as an option you are buying. If the money allows the origin, buy it with two Swiss reports agreeing, because at resale the origin will be doing much of the work. If the money does not allow it, buy the best colour the money does allow from wherever the laboratory says it came from, and do not pay for a country name attached to a stone that does not glow. Burma or Mozambique is the clearest example of the choice.

Weight thresholds

Price per carat climbs with weight and steps at the round numbers the market watches: one, two, three, five, ten. A collector building for value buys just above a threshold, never just below it, and never recuts a stone across one without doing the arithmetic first. The steps are where the market pays attention and where liquidity lives. A 4.9-carat stone is a 4.9-carat stone forever.

The paper is half the asset

Every stone in the core enters the collection with a report from Gübelin, SSEF, GIA or AGL that describes it to the hundredth of a carat, and the report is verified against the laboratory’s own records on the day the stone arrives. Due diligence is a sequence, not a mood, and the collection is only as strong as its weakest report. Reports age; criteria change; a collection held for decades should have its reports reissued from time to time so that the paper speaks the current language of the auction rooms.

The file

For each stone: the report, the invoice, the export documents, the photographs in daylight, the parcel paper if it exists, the valuation for insurance, and a record of every movement. Insure at replacement value and revalue every few years, because values move and the insurer pays on the last one. Write the stones into your will by report number and reference, not by description. A red stone is a dispute; a numbered stone with its file is an inheritance. The clients I work with keep this file in a private archive that follows the stone, so that when it changes hands the provenance goes with it.

A sequence for ten years

Years one and two: one stone, the best your band allows, in the species you understand. Learn it. Look at it in every light. Years three to five: the second and third stones, chosen so that each is the best of its kind rather than a variation of the first; a ruby, a sapphire, an emerald is a classic shape for a reason. Years six to eight: the difficult stone, the one that took a year to find, the Kashmir or the Mogok stone of size. Years nine and ten: reissue the paper, revalue, and decide what the collection is now for, because the answer changes. Sell only into strength and only with the file whole.

Ten years is not long in this trade. The stones were a few hundred million years in the ground. The plan is what makes a decade count.

Questions collectors ask

How many stones make a collection?

Fewer than you think. Five exceptional stones with clean paper are a collection; fifty good ones are an inventory. The market pays for the top of each category and forgets the middle, so every stone you add should be one you would be content to own alone.

Should I collect loose stones or finished jewellery?

Loose, for the core. A loose stone is judged on what it is: weight, colour, treatment, origin. Set into jewellery it acquires a brand, a design and a markup, and when it is sold the buyer pays for the stone and discounts the rest. Set the stones you will wear; hold loose the stones you are collecting.

Which coloured gemstones hold their value best?

Unheated ruby and sapphire of fine colour with Swiss paper, and Colombian emerald at minor or insignificant oil, have the deepest markets and the longest auction record. Spinel and tsavorite have moved strongly this century from a lower base, and I hold both, but the liquidity is thinner. Size, colour, treatment and origin decide value inside every species.