Diamonds are ones of the most expensive investment worthy minerals, their value only increase with time, they are easy to store and useful in everyday life. In the next article you can find anything required to know about investing in diamonds.
Why it is worth-while to invest in diamonds and diamond jewelry?
Diamond don’t take any unnecessary space – diamonds have always been regarded as a great value for exchange. The fact that such a small item, worth so much money is amazing. You can easily keep a diamond that is worth thousands of dollars in a small safe.
Diamonds are forever – diamonds are extremely resilient and do not degrade. Being the toughest material in nature you can be sure that nothing will ever happen to them, as long as you don`t lose them (and even in that case they can be insured).
They are enjoyable – due to the fact that diamonds don’t degrade or get destroyed, there is no meaning to the term “second-hand” in the diamond field. You can wear them for your pleasure as they increase in value.
The psychological dimension – a diamond is a physical material that you can feel and touch. It gives psychological reassurance in the investment, in contrast to stock or any other virtual investment.
How to wisely invest in diamonds and diamond jewelry?
The concept of diamond investment is pretty simple and based on the fact that diamonds are a desirable physical material. One that can be bought relatively easily, as a gift to women, kids or as an investment. The diamonds can stay in the family, and they do not lose their value. Therefore, they can be sold at any time, upgraded or put away waiting for their value to rise.
Know the basics (at the very least) – start from the beginning and study the basics – the diamonds language. First of all, you should know the four basic and important features of a diamond: color, clarity, cut and carat.
Set the budget according to the investment profile – if it is meant for jewelry, what kind of jewelry (earrings, ring or a pendent) and what cut are you looking for. Or maybe you prefer a large diamond as an investment or a colorful diamond.
Variety – buy a variety of diamonds, or in other words – don’t put all your eggs in one basket. If your budget is 50,000 SGD for example, it is recommended to check what are your options for this amount, and not necessarily go with only one diamond, it is possible to buy pairs of diamonds with different cuts. Round diamonds indeed are always with some demand, but the market is full on them, that’s why you should consider diamonds with different cuts.
Compare prices – after you have chosen what kind of diamond you want to buy and received an offer, it is best to go online and check the price of diamonds with similar features. This way you will know you payed a reasonable and fair price.
Accreditation! – Take into account that any change in diamond accreditation affects its value. Therefore, when purchasing a diamond meant for investment (future sale) you must receive certificates that specify the exact features of the diamond. Every diamond can be accredited by the best and strictest lab in the world – GIA. Even if the diamond you want to buy doesn’t have GIA accreditation, it is worthwhile to invest 100 USD (accreditation price is according to diamond`s weight) and to send the diamond for professional accreditation.
Inlayed or not inlayed – if you came so far, you are probably really interested in investing in a diamond. Investment in a diamond means that at some point you would want to cash-out and enjoy the spoils. Most chances, the future buyer will have some kind of vision for the future of the diamond, and in many cases the ring might be worthless. But, this doesn’t mean you shouldn’t inlay the diamond you bought as investment! Until the sale, we strongly recommend you to enjoy the diamond, wear it and let it sparkle. When you wish to sell, you should think if the ring serves the sale or not. If you decided it doesn’t – it is possible to easily remove the diamond with the help of a goldsmith, in the remaining ring you can inlay a gem or a different diamond according to your personal taste and needs.
Check where you are purchasing – in order to not overpay or receive a fake accreditation, buy diamonds only from the diamond exchange! It is strongly recommended to do some homework and read reviews and ratings in Google and other social media.
What are the disadvantages and risks while investing in diamonds?
There are three main disadvantages / risks while dealing with diamond investment:
Diamond’s market worth – while other merchandise like gold or silver have an index that can be tracked in the stock exchange, diamond doesn’t. There is a pricelist named Rappaport pricelist which is used by most sellers, but it is not enough. The pricelist takes into account only basic variables like weight, clarity and color. Eventually the only thing that determents diamond price is the market – supply and demand. Traders buy certain diamonds in prices that can be more than 10% higher/lower of Rappaport pricelist, based on experience. Indeed, the Rappaport pricelist regards only colorless diamonds.
About colorful diamonds – there isn’t any current standard within the market. The only way to overcome this is by learning, gaining knowledge and dealing with reliable sellers!
Selling a diamond – while buying a diamond is very simple, selling one is a little more complicated. It is possible to sell diamonds to companies that trade online, same way you sell old gold. In case of a rare and unique diamond there is the possibility to sell in a special featured auction or on special online websites. In case you have done your homework and bought a desirable diamond you probably won`t have any trouble selling it.
Patience – diamond`s value won`t increase in 30% within one year. For this reason, diamonds are perfect for investment, you can wear it and enjoy it`s beauty until its value rises.
Summery: every investment is bound to have some degree of risk. Diamond investment has both advantages and disadvantages, although we believe that with combination of education and knowledge the advantages outweigh the disadvantages, all the more so, we are talking about a product which is customary to the modern culture and with high demand that most people would buy at least once in their life-time.