I was looking at Etsy recently for interesting investment grade contemporary jewelry. Etsy, if you aren't already familiar with it, is an online Indie craft-oriented sales platform. As usual, most of the pieces I encountered might have been fine as fashion jewelry, but most definitely did not merit investment grade status. Unfortunately, determining if a specimen of jewelry is investment grade can be a bit of an art form in itself. To paraphrase a former U.S. Supreme Court justice, identifying investment grade contemporary jewelry is a lot like pornography; I know it when I see it.
In any case, I found a few desirable examples swimming in a sea of mediocrity. This is actually not an unusual state of affairs. Truly fine, investment grade contemporary jewelry is fabricated from the best quality materials into an artistically compelling design. This is harder to do than it might seem at first - actually an awful lot harder to do than it seems.
For one thing, most jewelers pursuing artistic pieces work on spec - meaning they create the jewelry without having a buyer first. They bear the cost of paying for all the materials upfront. And they must dedicate substantial design and fabrication time without any assurance that a buyer will eventually materialize.
This is one of the reasons artists - jewelers included - are often starving. It is also one of the reasons a lot of jewelers create their more experimental works out of silver, quartz and other relatively low value materials. If they misjudge customer demand and make an unsalable piece, at least they've only wasted some time instead of valuable materials as well. Unfortunately, the use of low priced materials tends to disqualify jewelry from investment grade status - although this rule of thumb is not absolute.
It is much safer for an artistically minded jeweler to take work on commission - meaning finding a client first and having him pay either part of or the entire fee upfront. This removes most or all of the risk associated with working on spec. But commission work is difficult to get unless an artist has already cultivated a client base over many years. And developing a client base only happens after first creating captivating or intriguing jewelry - you guessed it - on spec. It can be a discouraging catch 22 situation.
A few daring jewelers just don't care though. They will sink copious amounts of time and money into daring and evocative pieces with no potential buyer lined up - profits be damned. These are the sorts of works I am constantly searching for on sites like Etsy. But, as I stated before, they aren't easy to find.
Artists looking to create the very finest contemporary jewelry face other challenges as well. If you've ever spoken to artists about the creative process, they will usually admit that it can vacillate wildly between being joyfully easy at some times and frustratingly difficult at others. And, of course, there is no guarantee that the product of their artistic endeavors will be good, even if the process is relatively painless. So there is always an element of chance in creating a great work of jewelry. This is the reason nearly every artist will regularly abandon works throughout his career before they are fully completed. Sometimes you just can't save a doomed piece, no matter how much you try.
But when everything goes right - when all the unpredictable stars in the creative process align - a jewelry artist can create a truly magical, special piece. These masterpieces are physical manifestations of the genius of the creative mind. They represent the apogee of human culture distilled into a single, small glittering object. They are miniature works of art expressed through the coveted medium of colorful gemstones and precious metals.
The difficulty of investing in contemporary jewelry is often underestimated. Let me share some shocking Etsy statistics that underscores this point. Right now there are almost 7 million pieces of contemporary jewelry on Etsy that are categorized as "handmade". However, according to my best conservative estimate, only about 2,000 of these pieces are definitively investment grade. Perhaps another 4,000 to 6,000 pieces are borderline in nature, straddling the edge of investment grade status. If you add up all the possible investment grade contemporary jewelry on Etsy it amounts to no more than 8,000 pieces in total. This represents less than 0.12% of all handmade jewelry on Etsy, using extremely generous assumptions!
If we assume that the average price of a piece of contemporary, investment grade jewelry on Etsy is $2,000, we can infer that there is somewhere between $4 million and $16 million worth of them available on the platform as of early 2017. Ten million dollars might seem like a lot of money. And for most of us ten million dollars is a lot of money. But if institutional money management companies ever figure out how rare, special and desirable investment grade contemporary jewelry is, it would sell fast. A medium sized hedge fund could easily purchase every investment grade piece currently listed on Etsy in a busy afternoon and the total cost would be a rounding error on their balance sheet!
