What you should know before investing in jewellery, according to Dato’ Sri Meer Sadik Habib
Going for the gold
From stocks and cryptocurrencies to alternative streams such as wines and Legos, investments come in different types, and when it comes to jewellery, it’s no different. While gold is one of the most popular in Malaysia, apart from the precious metal, there are diamond and antique jewellery to take note of too. To gain more insight into the world of jewellery investment, below, we speak to the managing director of Habib Jewels, Dato’ Sri Meer Sadik Habib on jewellery investment, and the group’s direction in light of the pandemic:
Is jewellery a good investment?
Generally speaking, yes. In fact, investing in jewellery means that you get to wear your investment.
What are your thoughts on investing in gold, diamond, and gemstone jewellery respectively?
Over the years, gold has been a good investment and is seen as a hedge against inflation. It is a “safe haven” during times of uncertainties due to its value. When I was young, I personally saw how the Vietnamese arrived on our shores in boats. They came without carrying much cash—instead, it is gold that they heavily depended on as a means to trade off using its high value. We are not talking about gold price here—back then, people just understood the value of gold.
When investing in gold jewellery, there are two things you need to understand—gold price and gold value, and they are different. The price is a determined price point (by weight) which we can get by referring to pricing charts or index, while the value is a subjective valuation of how much it is worth, for example, due to its rarity and demand. Note that it is because of the intrinsic value of the precious metal that determines its price point—this is why gold’s value over the years has been preserved, while its price point has been increasing due to inflation. So, when looking to buy gold for investment, ask yourself this: “Am I interested in its price or its value?”
As for diamond and gemstone jewellery, they can be very good investments but it can be tricky. It requires a lot more research and knowledge to really ascertain the real value of diamonds and gemstones. Take Paraiba for example. Paraiba is from the Tourmaline family and was first discovered in the 1980s in Paraiba, Brazil. It is considered an exotic variety of tourmaline of a specific colour. Top-quality Paraiba costs over US$30,000 per carat. Can you imagine a pair of Paraiba earrings actually sold for a record price of US$194,730 per carat!
What constitutes an investment-grade diamond?
Certificated and solitaire diamonds are better for investment. Diamonds are an investment for a lifetime as they last from generation to generation due to its durability of being the hardest gemstone on earth. No two diamonds are the same and that's what makes it special.
There are common aspects that are considered when evaluating diamonds, known globally as the 4Cs: Colour, clarity, cut, and carat weight. But more importantly, for investment, we also need to consider the rarity and uniqueness of a particular type of diamond. For example, about 90% of pink diamonds come from the Argyle mine in Australia. That mine has depleted its supply in 2020, so the value of pink diamonds remains strong.
What are the most important qualities of an investment-grade diamonds?
When investing in diamonds, the most important quality to look out for would be the rarity of the diamond. As mentioned before, diamonds are mined resources and are limited to the world’s supply. Hence, its rarity or scarcity would determine its exclusivity and consequently, its value.
Coloured diamonds—be it pink, blue or even yellow—are considered extremely rare. Blue diamonds need an element called Boron which gives it its blue colour. Boron is not present in colourless diamonds. This makes it extremely desirable and it’s a very interesting form of investment.
Is there such thing as jewellery investment trends?
In Malaysia, buying gold has always been a part of our culture. As for diamonds, there will always be a demand as it has always signified important moments such as weddings, full moon and anniversaries.
At Habib, we regularly innovate in terms of our merchandise. We try to develop the latest trends in jewellery design. Our Oro Italia collection has earned us many compliments from our customers throughout the years. The reason our customers love this collection is because the designs are current and it possesses a high percentage (22k or 916 gold) of gold that is great for design and good for investment. Hence, it is an investment that you can wear.
Lately, we also notice that there has been an increasing demand in gemstones like spinel, tourmaline, and garnet. There's also a demand in having jewellery customised to their personal preference as a way of expressing their individuality.
Do you invest in jewellery? What’s your best investment piece so far?
I do invest in jewellery, but mainly antique pieces. We recently had an Instagram Live session where I showcased some of my personal collection. It’s always a joy for me to share about them with others. We sell many things at Habib, but not everything is for sale—some jewelleries are just priceless.
Investing in antique pieces is about preserving the tradition, heritage, and the history of the pieces. For example, the Kerongsang Toh which was very popular as a fashion statement during the olden days of Peranakans. The kerongsang is mostly worn with baju kebaya, hence this jewellery is considered a part of our national costume. If you are in Penang, drop by the Habib Heritage gallery located above our Habib Showroom on Jalan Masjid Kapitan Keling. This is where we showcase a wide variety of antique pieces in an actual Jawi-Peranakan setting. Experience and get to know the jewellery trends from the previous century.
For those who’d like to start investing in jewellery, what are some tips they should take note of?
If you are going to invest in gold, make sure you go for those with high gold content—at least 22 karat or 916 gold. If you want to start investing in diamonds, then I would suggest to start with at least 0.3-carat diamond certified by the Gemological Institute of America (GIA). If you have more budget, you can always go for a bigger diamond. For those who are more adventurous, you can also try investing in gemstones. Tourmaline or garnet are great as starters as they are relatively inexpensive.
With more and more people turning to online jewellers these days, what’s the key to survival for you guys?
People do buy jewellery online, however, most people would still prefer to visit the retail stores. We need to remember that in this industry, there is one aspect in retail that is very difficult to replicate—the customer experience. One significant part of the customer experience is being able to touch and feel the fine workmanship of the pieces. You will need to consider different elements in the jewellery which cannot be seen through photos. You cannot understand a diamond or a gemstone just by looking at the certificate. You need to see the diamond and the scintillation and that is how it speaks to you.
The key to our survival until today is the trust in our brand. Another one of our core values is sincerity and honesty. This was the value that was carried on by my late father, Datuk Habib Mohamed since we started our business in Penang over 60 years ago. That value is well associated with our brand and had gain the trust and support of our loyal customers.
How has the pandemic affected the business at Habib Group?
The COVID-19 pandemic as we know has fundamentally changed the way every business works; from how we serve our customers to how we conduct meetings to how we manage our logistics. All these years, we have never faced a situation where we were forced to close all of our retail outlets for almost two months. It was definitely a challenging period for us as the majority of our sales were from the retail outlets. Even though there was no revenue coming in from the retail outlets, we still had the responsibility to fulfill our obligation of paying expenses such as salaries and subscriptions.
Fortunately, we were already actively selling on e-commerce platforms. Hence, when the Movement Control Order (MCO) was announced, we relied on our e-commerce sales as it was our only source of revenue. The pandemic helped us to re-focus on what is most important to the business. I am very thankful to have a strong management team at Habib. Throughout the MCO period, they worked tirelessly around the clock to ensure that the business kept on going. We managed to focus on things that we were not able to do on a daily basis such as up-skilling staff through online training.
You’ve been involved in the family business for decades. What keeps you passionate about the jewellery industry?
Jewellery to me is art. It embodies the creativity of those involved, from the designers to the craftsman. There’s a certain beauty towards making jewellery that excites me. Each piece is unique and it carries its own story. I always believe that every jewellery must embody quality and creativity. But today, we go a step further in ensuring that they should also embody timelessness and modernity. It amazes us how a piece of jewellery made 30 years ago would still be matched with the latest fashion of today.
Another thing that keeps me passionate is how jewellery brings joy to our customers. We see this every day when our customers walk into our showrooms. When customers walk into our showrooms, they are there to celebrate a significant milestone in their life—weddings, birthdays, anniversaries and full moon. These are not only significant occasions for them, but they represent some of the happiest moments of their life.
Where would you like to see Habib 10 years down the road?
As a Malaysian myself, I would love for Habib to be one of the iconic names which puts Malaysia on the world map—a name that represents our unique society living with various cultures and background. We want to produce world-class products that showcase and represent us as Malaysians.
There’s a saying that goes “Jewellers are tastemakers of society”, and it feels like it is our obligation to ensure that we live up to this saying. For this reason, we will need to continuously innovate our designs whilst maintaining the embodiment of our traditions and heritage within them.
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