Luxury living: Investing in diamonds
They say a diamond is a girl’s best friend. Well it can be anyone’s best friend if it’s high quality. Investing in diamonds can be quite profitable.
They say a diamond is a girl’s best friend. Well it can be anyone’s best friend if it is of high quality. Investing in diamonds can be quite profitable, if one knows how to judge a diamond’s worth. Knowing the four C’s of diamond buying is important, because their combination determines the value of the diamond. The four C’s are cut, color, clarity and carat. The cut is how the diamond is shaped, and also how many facets it has. The more expensive cuts are emerald, radiant and the new trillion.
Diamonds come in an array of colors. White is the most common color, but they also come in blue, pink, green, red, canary (yellow) and purple. Color stones are more precious in value than their white counterparts. Color is rated on an alphabetical scale from D to Z, with D being the finest.
Clarity is the amount or lack thereof of imperfections in the diamond. The clarity scale starts at F for flawless, and includes VVS1, VVS2 VS etc. The VVS sands for very, very small (imperfections). Carat is the weight of the diamond. It uses a numerical scale, with the higher the number, the higher the weight. Investment diamonds begin at a weight of five carats.
All diamonds are not of high quality. Some are so low in quality that a resell will incur a lost instead of a profit. Investment diamonds are usually bought and sold loose. Settings are of no value, unless there is historical meaning behind them.
Investing in diamonds is a high-end transaction. Investment diamonds starts above fifty thousand dollars wholesale. Buying at retail prices will not produce a profit on the diamond in a few years. A reputable dealer should be able to sell you certified diamonds for no more than ten per cent above their cost. Pay any more than that and you are overpaying.
Buying an investment diamond at the right wholesale price is imperative. The serious and smart buyer uses the Rapaport Diamond Price List as a guide for buying and selling their diamonds. The Rapaport diamond Price List is a weekly publication that lists the current price of diamonds.
Diamond investment is based upon rareness of the diamond. Rarity brings about a high demand. There must be more buyers than available diamonds. Fine, five carat plus white diamonds can provide an acceptable long term investment, but the diamonds with the highest appreciation are rare, natural color diamonds such as pink, yellow, blue, purple, red and green.
Colored diamonds have never fallen in price. During recessions, they tend to retain their value and in stable or healthy economies they tend to appreciate in price. Since 1970 pink diamonds have approximately doubled in price every 6-7 years, blue diamonds have doubled in price about every 5 years and canary (yellow) diamonds have doubled in price about every 8-10 years.
Always buy your investment diamond with a Gemological Institute of America (GIA) or European Gemological Laboratory (EGL) certificate. Most rare and precious diamonds have a certificate that is issued at the time of its cutting, and will remain with it until it is reexamined for a reason, such as setting it as a ring or pendant. This is the diamond’s pedigree, your guarantee of what you are buying and the future purchaser’s assurance of what they are buying from you. A GIA or EGL certificate accompanies most rare and precious diamonds.
Investing in diamonds can lead to monetary profits or may be used as insurance against hard times. But making sure you make a wise investment is your responsibility. Buy diamonds at wholesale, use the Rapaport Price List, only buy diamonds over five carats and more than $50,000. And always insist on GIA or EGL certification. Follow these guidelines and your work seeking the right diamond will in turn work for you.