Investment can be defined as the process or action of investing money into something for profit. This can be investing your money in a financial plan, or scheme, or buying an item that you hope will rise in value by the time you sell it.
Out of all the precious metals, gold has become the most popular form of investment. Many people see it as diversifying risk and putting their money into areas other than financial ones. Although, like the financial market, the gold market is subject to volatility and speculation, too. Just because gold has been a good investment in the past, is not to say that it will be in the future. It is subject to depleting gold supplies and the demand for all-things gold as pieces of jewellery. Every item of gold has what is called a “bullion value”. This is the value given to the item in accordance with how much precious metal it contains. It is primarily how much you could recoup for the item just based on its meltdown value. Although, most decorative and antique gold items have a value beyond this.
Gold is available in different carats, or karats. In gold terms, carat refers to the purity of the gold. The amount of gold parts out of every 24 that are gold as opposed to a base metal such as copper. For instance, 9 carat gold would be 9 parts gold to 15 parts copper, as the base metal. 18 carat gold is therefore more valuable. Many People collect gold sovereigns. These contain 22 carats of gold. A quick check to see if a gold sovereign is genuine is to make sure that it weighs 7.98 grams. This, of course, depends also on if there is any significant wear to the coin that could explain its reduction in weight.
To ensure that gold is genuine, a system of hallmarks is in place. The assay office where the object of gold was sent off to be assayed by its goldsmith will strike it with a set of marks to confirm that it is gold. You can look for the following marks to satisfy yourself that you are indeed buying gold.
Purity Value (represented in parts per thousand) – 9ct = 375, 18ct = 750 =, 22ct = 915.
Assay Office – London (Leopard’s Head) / Birmingham (Anchor) / Sheffield (Rose) / Chester (Shield, Sword, and 3 sheaves of wheat), Edinburgh (Castle).
It was in 1903 that Sheffield was permitted to mark gold as well as silver. They added the Rose as their mark. Then, in 1973, Sheffield dropped the Crown mark from their silver and began using Rose for the hallmark on silver, too. The Rose continues to be used by Sheffield.
The Chester assay office closed in 1962, so the piece cannot be genuine if you see their mark used after this date.
Also look out for a date letter, maker’s mark, and sometimes a duty mark.
Diamonds are not just a girl’s best friend but an investor’s, too. Apart from being worn for special occasions, they are a great investment. Diamonds are small to house in safety deposit boxes, and along with gold and real estate, have a history of appreciating in value. Apart from being movable, they are also durable. Diamond is the hardest substance known to man. To measure its quality, we should consider the 4 Cs.
Cut – The most popular cut is the Round Brilliant cut, which has 58 facets including the culet. The culet is the flat face on the bottom of the diamond. This cut is popular because of how it reflects the light and sparkles.
Carat – The value of diamonds very much depends on weight/size. A half-carat is the equivalent of 200 milligrams.
Colour – Near colourless are considered the best diamonds. The most expensive colour of diamond in the world is red. Just one carat of red diamond can sell for $300,000 to $2 million dollars.
Clarity – For diamonds of between one and two carats, a clarity grade of SI1 should be looked for, so that the diamond will not have any inclusions that are visible to the naked eye. As a guide, diamonds over two carats need to have a clarity grade of VS2 or higher to avoid visible inclusions.
The stamp market is thought be highly volatile. So, if you require your money back within say 2 years, you should not be considering it as a form of investment. Stanley Gibbons, in fact, only recommend it as an investment over 5 years. At its West End emporium, Stanley Gibbons house a million stamps from all over the world for perusal or purchase. The world’s most valuable stamp is the British Guiana 1856 1¢ Magenta, which sold for $9.5 million (£8.1 m) in 2014. It was bought by shoe designer Stuart Weitzman.
Values are constantly changing, but at time of writing, in the UK, a 22ct gold full sovereign was worth £335.24 as bullion. This is calculated as 7.31 x by the price per gram of gold content. George III gold sovereigns are thought to be the most valuable and would not be melted down to recoup their values. One Carat of diamond might be £1,350 upwards, and a Penny Black, the world’s first adhesive postage stamp, anything from £75 upwards.