Yes, that 💍 can be a good investment

Hi ladies and gents,

today’s edition was probably one of my favourites ones to write. While I was doing the research, I was already imagining which purchases I could justify as “an investment” to my future husband. But lets not get ahead of ourselves 🫣

• Another way to diversify your portfolio - How to make your portfolio sparkle 💍

• Closing the Gap - Iris Apfel

• Book of the month - Capital in the Twenty-First Century by Thomas Piketty - part III

LET’S COVER THE BASICS

Shine bright like a diamond

Oh what would I give for a Juste un Clou bracelet from Cartier! I am not yet on the market to buy myself a Cartier watch either, but making a good research in advance, is the only way to go about planning pricey purchases.

So, why would you even buy expensive jewelry?

Well, for starters, it is a good way of diversifying your investment portfolio. Just like art market, jewelry market does not follow regular movements of stock market, so it can be a great way to protect your money from economic movements - inflation, recession etc. 

Another reason is, that it can be kept as a great store of value. While some pieces may not rise in price drastically, well-made pieces from top designers are considered by many experts to be an excellent store of value, so again it can be used to protect yourself from movements on the markets. The difference between having some stocks and having a beautiful piece of jewelry is also in the fact, that having some nice earrings or a necklace can brighten your day 💎 

Jokes aside. Nice jewelry is an asset that is tangible - you can wear it on special or not-so-special occasions to upgrade your outfits, it’s not just a balance on your trading app. Just don’t flaunt it too much on your Insta. Remember what happened to Kim K and that robbery in Paris.

A nice piece of jewelry, especially if you get it specifically designed for yourself, can have emotional value. So when buying something, keep in mind that you need to actually like the pieces that you will invest in and maybe even pass down to your kids or grandkids. #buildinggenerationalwealth

Now, let’s look at some numbers.

As you can see, buying certain brands can be quite lucrative, because not only that they can hold value, they can also increase it. Rolex, Van Cleef & Arpels, Audemars Piguet and Patek Philippe are the leading ones. Breitling, Cartier and Bvlgari are also a good choice.

Besides looking at the brands and their returns, there is a couple of general things that you need to keep in mind when planning that first purchase.

• Buy only in specialized stores - that Tiffany ring that was super cheap on Instagram? Probably fake. So make sure that you buy from brands official websites, their physical stores, well known luxury online stores (Net-a-Porter) or verified resellers such as TheRealReal or Vestiaire Collective that authenticate everything they resell.

• Only high-quality jewelry is stable in value - you should choose real jewelry with a high content of precious metal. Gold and platinum are very stable in value. Diamonds or luxurious colored gemstones also hardly lose value.

• Ask for a certificate - a certificate detailing the criteria of the jewelry is extremely useful as security and useful if you decide to resell the piece at some point in the future.

But before you run to the closest jewelry shop, let see what are the cons of buying that new shiny bracelet.

• Hefty prices - it’ll cost ya! 💰 Unfortunately there is no option to buy shares on the black diamond just yet (maybe a potential business idea? 🤔), so if you’d like to invest in a significant way, we are talking a couple of thousands euros.

• Storage and insurance costs - if you plan on buying something really expensive, you also need to think about where you’ll store it and how to insure it. If you plan on not wearing the pieces and staring at them on Sundays, bank deposit boxes might be a safe solution as well.

• Not a very liquid investment - finding someone to buy that diamond from you, can be a bit tricky. Buyers for such pieces are unfortunately not just a click away.

And now, to the best part. 

Which pieces could be a great investments?

• Rolex Watches and other luxury watches
  Combination of craftsmanship, prestige, and limited production are the reasons that luxury watches often appreciate enormously over time. Their growth in 2022 was a nice 18%. As I already mentioned, brands like Rolex, Cartier, Patek Philippe and Audemars Piguet continue to appreciate in value and are considerable respectable investments by experts everywhere.
  

• Cartier Juste Un Clou bracelets
  Cartier's Juste Un Clou bracelet is an iconic piece due to its unique design and prestigious brand heritage. Even though it was designed in the 1970s, the design is very contemporary and has been one of the top selling pieces for years. It can be one of the best investments you can make, since they hold approximately 106% of their value.
  

• Van Cleef & Arpels Alhambra necklaces
  Van Cleef & Arpels Alhambra necklace is another timeless and elegant piece with potential as a jewelry investment, due to its instantly recognizable design. The design intends to convey luck, love, health, and wealth. Well, you will need wealth beforehand to buy this necklace, especially if you buy a very limited edition. The prices can be in 5-figure numbers.
  

• Cartier Love bracelets
  Another very recognisable design is the Cartier Love bracelet. The Love bracelet is famous for its unique design, made of two C-shaped halves that are hinged together and fastened with a tiny screw. The design was inspired by the idea of love and commitment. They maintain an average resale price between 85-96%.

• Bulgari Serpenti
  Ah snakes. The Serpenti collection includes necklaces, bracelets, rings, earrings, and watches, often crafted using luxurious materials such as gold, platinum, diamonds and a variety of precious and semi-precious gemstones, so you have a wide collection that you can choose from. You can pick whatever your heart desires. And wallet allows.

And to conclude today’s lesson. 

Be smart when picking your next birthday gift 😏

CLOSING THE GAP

Iris Apfel

Oh Iris ❤️ The oldest living teenager - as she likes to call herself.

Iris is a businesswoman, interior designer, fashion icon and actress. Well, she used to be. Now, she is a model. Mostly known for wearing bold, colorful outfits and never without her iconic big glasses, she signed with IMG modelling agency at 97. So if someone says, that your are too old to be a model, tell them about Iris.

Work wise, she is most known for leading her career in textiles, including a contract with the White House that spanned nine presidencies. But besides that, she is one of the most famous icons in fashion. When The Metropolitan Museum of Art in New York does an entire exhibition about your style, you did something meaningful in fashion. It was the museum's first time showcasing an exhibit about clothing and accessories focused on a living person who wasn't a designer. She was also featured in a 2014 documentary called Iris.

I think she is just great. Living her life for the past 102 years, marching to the beat of her own drum.

BOOK OF THE MONTH

Capital in the Twenty-First Century

by Thomas Piketty

Last week we stopped at the second fundamental law of capitalism. It goes like this.

β = s/g

β = capital/income ratio
s = savings rate
g = growth

This formula is trying to tell us, that a country that saves a lot and grows slowly, will over the long term accumulate an enormous amount of stock of capital, which of course has an effect on the social structure and distribution of wealth.

Another way of saying this is, that in a more stagnant society, wealth accumulated in the past, will inevitably acquire more importance. Decreased growth, not only economic, but also demographic, is responsible for the accumulation of wealth and hence the inequality in the society.

Important difference between the first and second law is, that the first one can be applied more broadly and in the moment. Whereas the second law, is valid only in the long term.

If a country saves a proportion - s in the formula - of its income indefinitely, and if the rate of growth of its national income g permanently, then its capital/income ratio will tend closer and closer to β = s/g and stabilize at that level.

More coming next week.

SOME NEWS

• A light weekend watch. The documentary about Iris Apfel.

• Do you maybe want to invest in a bag instead of jewelry? This report might give you an insight into which brands are wort investing in.

• Another weekend documentary recommendation. The book of the month was also turned into a documentary.