Diamond can be a good investment option, but it requires proper research
before investing your hard earned money in diamond. Carefully planned
investment will always enable you to gain high return at time of
You should consider following diamond investment pre-requisites:
Educate Yourself: Learn about the 4 Cs and various factors that affect and determine the value of diamond. Studying market trend will provide you an insight on which type of diamond people are generally buying. At the time of selling, this will increase the prospective buyers of your stone.
Take Help of a Professional: Consult a gemologist, diamond appraiser, diamond merchant or a jeweler before doing final purchase. Tell your budget and preferences and let him guide you in selecting the right diamonds for you. Depending on the amount of money you want to invest you can consider between investing in loose diamonds or diamond jewelry.
Single Stone or Set of Stones: Overall price of set of matching stones is more than sum of price of individual stones. Also, a single stone has more liquidity as compared to matching stones’ set. Investment in single stone has benefit of high liquidity, while matching set of stones may give you higher return. So, invest according to your preference.
Stick to Round Brilliant Cut: Diamonds prices are based on current popularity of trends and diamonds which are in trend right now will sell at higher price. Nevertheless, one must always sell diamonds without setting very high expectation.
Suppose that, at the time of investment Marquise diamond was in demand, so you bought it at high price. Now, say after 3-4 years you want to sell the stone. But, unfortunately you may not get good return as marquise diamond may have gone out of fashion. So, it is advisable to always go with round brilliant cut diamond for "investment purpose". This is because being the most versatile shape, round has always been in trend and will always remain so.
Opt for White Diamonds: Fancy colored diamonds are rarer than white diamonds and there is little awareness about its quality and price. Here again demand and supply logic comes into picture. You will find few buyers interested in fancy colored diamonds. Therefore you may face difficulty in selling fancy colored stones. So, always stick to white diamonds for investment purpose.
Don’t Delve into Rapaport Price List: You might have come across dealers saying that for particular diamond you get 45% off on "Rapaport Price" and it’s the best deal for you. Think twice before considering such low value diamonds as the rapaport price is just a benchmark price. It does not take into considerations cut quality, symmetry features and fluorescence of diamond.
Stone will always be valued less if it has above mentioned flaws. So, dealer is not doing any favor to you by giving 45% off as he is just doing good selling of his low quality diamonds. It is possible that a particular diamond may be valued at just 10% below "Rap Price" but it could be a good quality investment for you. If you invest in low quality diamond it will be difficult for you to find a buyer who will offer good price for your low quality diamond.
So, never be misguided by Rapaport Price List. It’s not for retail customers like you. This price list is for diamonds expert and traders who do everyday buying and selling of diamond.
Do a Price Research: Almost all jewelry retailers have the identical pool of precious stone and precious metal resources throughout the nation. The visible difference is exactly how much profit they would like to make from you for the sale from a jewelry piece.
A lot of jewelry stores hold the same or maybe comparable designs of jewelry, but you may find completely different pricing for them. Their profit margin can be as high as 40-50%. Now, when you have bought an overpriced diamond then how can you expect to earn profit from selling it over some period of time?
So, you should definitely look on internet a little bit more before you buy any diamond jewelry. You can also take advice of a trusted person who deals in diamond.
Certificate is Mandatory: Never buy diamond without its certificate no matter how good the deal appears to be. Certificate should be of renowned international laboratories like GIA, AGS, IGI, etc. Having a diamond certificate will always help you at the time of selling.
Certificate given by the jeweler of any small time laboratory does not hold any value. Always remember that you can compare prices of only those diamonds which have been graded by the same grading laboratory, as each laboratory has its own grading parameters and benchmark.
Have Patience: Just like any other investment, diamond investment also needs patience. You should always keep a track of diamond price. Take experts guidance if you feel that market is right to sell your investment. There are various way to sell your diamond either you can directly approach the person from whom you bought or you can approach diamond dealer/jeweler and ask how much he will pay. You can also contact online selling sites.
Finally, in the end I would like to say that always be informed in order to avoid being on losing side.