Breaking news: Investment-minded luxury consumers no longer chase trends. Nowadays, they track market performance, resale patterns, and asset durability. What once sat pretty on velvet trays and display shelves competes with equities and real estate for a place in a financial portfolio.
Gold and diamonds are generally in demand, and so are Hermès Birkins. However, not all jewelry and bags are as popular in the secondary luxury market. Some items preserve wealth loudly (or silently, like these “quiet luxury” handbags), while others require a sharp eye for demand and interest peaks. Which pieces have higher returns? Let’s talk about it.
Pros and Cons of Jewelry as an Investment
Jewelry consisting of the highest-quality materials increases in value over time. Buyers consider raw material content and—in many cases—brand reputation. Cartier, Van Cleef & Arpels (VCA), and Tiffany & Co. are examples of top jewelry brands with strong resale interest due to design history and market trust. But regardless of whether a piece of jewelry is branded or not, among the most valuable are made with gold and diamonds with verified grading.
The benefits of investing in jewelry:
- Intrinsic material value: Jewelry made from precious metals and stones has measurable worth independent of brand or fashion trends. Gold, in particular, trades on international markets. In fact, gold prices are higher than ever due to inflation, economic instability, and central bank buying. Demand is strong, supply remains limited, and investors are moving capital into this safer asset. Also read: How to Calculate Gold Jewelry’s Price
- Global liquidity: One of the best things about fine jewelry is that people can appraise and sell it in almost any country. The global demand for gold and diamonds supports resale through formal and informal markets. A quality piece can move across borders without significant losses in valuation.
- Long-term durability: High-karat gold does not corrode or degrade, and precious stones resist age and wear when maintained. These pieces can retain high appraisal value for decades.
- Compact: Jewelry is the epitome of “size doesn’t matter.” It holds large amounts of value in small packages, taking up minimal space, unlike cars, real estate, and other tangible assets.
- Auction market resilience: Cartier Love and Tiffany Lock are shining examples of collections from legacy houses that sell for high prices through Sotheby’s, Christie’s, and Biltmore Loan and Jewelry. Non-branded pieces also fetch high offers from Biltmore Loan and pawnshops, especially when they feature quality materials, timeless design, or exceptional craftsmanship. Read Branded vs. Non-Branded Jewelry for more details and to learn how to use them as collateral for loans.
As for the disadvantages:
- Retail markup: It’s no secret that luxury jewelry has high markups. To cite an example, a ring selling for $4,000 might include just $1,000 worth of gold and diamonds. The rest is from branding, design, and retail costs. Nonetheless, well-maintained pieces from high-end brands do retain value.
- Limited appreciation: Gold prices rarely outperform aggressive financial assets like real estate and individual stocks. Unless the piece is extremely rare or historically significant (e.g., Wallis Simpson’s Cartier Panther bracelet or the La Peregrina pearl), jewelry is more likely to retain value with minor increments over several years rather than multiply in price immediately.
- Style obsolescence: All trends evolve. Many modern consumers may not be interested in pieces from dated eras, especially those from lesser-known brands.
- Prevalence of fakes: Lab-grown and synthetic diamonds, as well as gold-plated jewelry, circulate the secondary market regularly. Investment-minded buyers demand authentication before committing, so sellers must work through certified dealers or auction houses to avoid loss and reputational damage.
Pros and Cons of Designer Handbags as an Investment
Unlike fine jewelry, handbags do not have inherent value through material content. Their pricing depends on brand name, model, condition, rarity, and demand at resale. The best investments in this category are from Hermès, Chanel, Louis Vuitton, and, to a lesser extent, Loewe, Gucci, Dior, Prada, Bottega, Celine, and The Row. These luxury handbag brands maintain pricing discipline and release limited editions that attract collector attention.
The benefits of investing in handbags:
- Resale potential on iconic models: Certain bags appreciate after purchase. The Hermès Birkin and Kelly are prime examples of handbags that have generated higher returns than gold in multi-year periods. Rare models in neutral tones and exotic leathers outperform due to buyer demand and limited availability.
- Rapid resale infrastructure: Online platforms such as Biltmore Loan and Jewelry or The Relux authenticate, list, and sell handbags with fewer logistical obstacles than traditional auction houses.
- Short-term return opportunities: Those lucky enough to buy a high-demand, hard-to-get bag from boutiques may resell them for premiums immediately. For instance, to receive an in-store offer for an Hermès Birkin, most customers must establish a relationship with the brand. Those who manage to acquire one may resell the handbag at a premium to buyers who want the bag but lack that relationship.
- Scarcity through brand strategy: Hermès and Chanel restrict production intentionally and implement controlled pricing increases. These strategies protect resale value by curbing saturation and inflating demand.
As for the downsides:
- Condition sensitivity: Leather deteriorates, corners scuff, hardware discolors, and the interior is vulnerable to stains. Unfortunately, signs of wear and minor defects lower resale prices substantially.
- Trend-based: A model in demand today may receive less interest next year, and then come back stronger than ever a few years later (e.g., the Louis Vuitton Neverfull) or never.
- Counterfeit prevalence: Designer handbags have an overwhelming counterfeit market. “Superfakes” replicate serial numbers, stitching patterns, and materials with extreme accuracy. As a result, authentication has become more complicated, and mistakes incur financial loss.
- Maintenance burden: Luxury purses can be high-maintenance with their need for proper stuffing, dust bags, and temperature control. Improper storage can tarnish hardware, deform the bag’s shape, and enable mold growth. These factors reduce resale options and price.
- Regional demand variability: Resale success is location-specific. With the exception of certain handbags, some models appeal more to American consumers, others to Asian and European collectors. Jewelry, by contrast, retains broader cross-cultural demand due to standardized valuation.
Jewelry or Handbags: Which Liquid Asset Is the Better Investment?
In general, jewelry crafted from precious metals and gemstones is a more stable investment. Its resale value depends on measurable benchmarks, such as karat purity for gold and the Four Cs for diamonds. Consumers interested in long-term stability, not quick returns, would benefit from investing in fine jewelry.
On the other hand, designer handbags have higher return potential over short periods, especially for consumers offered rare models at retail pricing. In hindsight, leather handbags are more high maintenance and require awareness of shifting buyer preferences. The majority of purses also lose value immediately after purchase. The few that do appreciate are within a narrow tier of brand and condition requirements. Luxury handbags suit investors willing to ride market trends and capitalize on resale windows, rather than wait for slow appreciation.
Where to Sell Fine Jewelry and Designer Bags in Scottsdale, AZ
Here at Biltmore Loan and Jewelry, you’ll receive the most competitive cash offers on jewelry, handbags, and other luxury goods. Sell or secure a loan against your high-value assets today.