5 Things You Need To Know About Investing In Diamonds

For most people, the primary reason for buying a quality diamond is to make that grand gesture of love and commitment. But nobody ever said you had to be committed to that particular diamond through sickness and health.

In fact, most couples tend to upgrade once or twice over the years, because if you’ve done your homework and made a smart investment, why wouldn’t you? Everyone knows that diamonds are a girl’s best friend, but they’re also time’s best friend.

While most things you invest in have the capacity to depreciate over time, diamonds rarely do. Anything with miles or gigabytes will yield a minimal return on your investment, but diamonds are infinitely valuable, and that’s something that anyone can appreciate. In the case of diamonds time is not of the essence. Clients often expect a quick return on their investment but the reality is a diamond’s value needs time to mature. So only purchase an investment grade diamond if you have the time to wait for the market to ripen. Here are 5 things you need to know about investing in diamonds.

1. Shape

When it comes to failsafe – round diamonds are always your best bet and they will yield the highest return. Other shapes have a habit of going in and out of style. This, of course, doesn’t mean that a fancy cut is a bad investment – it just means that when it comes to timelessness, round will always be around.

2. Weight

As a general rule of thumb, you always want to invest in at least 1.00 carat or larger, and you want to hit the money numbers, like 1.25ct, 1.50ct, 1.75ct, etc. This is super important because diamonds that weigh even just slightly below these standards are priced significantly lower. One hundredth of a carat may not seem like much in weight, but the mistake of buying a 1.74ct diamond could make a huge difference in price.
diamond-weight

3. Color 

Always look for diamonds with G color or better. The Gemological Institute of America (GIA) has a color grading scale that is the most widely accepted in the diamond industry. This scale starts at D and ends at Z, but anything lower than a G is not a worthwhile investment. However, if you are looking into fancy colored diamonds, there is a completely different scale that is used, which begins at the white diamond’s Z color. Colored diamonds may be a good investment, but you are limiting your market because not everyone is shopping for colored diamonds or can afford the really vivid color grades. This is why it’s usually best to stick with white diamonds. There is just more demand.

4. Just say no to chocolate – chocolate diamonds that is. Screen Shot 2015-11-18 at 7.33.44 PM

These brown and black diamonds have recently been branded as some kind of rare, recently discovered anomaly. In reality, they’re industrial grade goods with a new and improved logo. As a result, they have almost no resale value.

 

5. Clarity.

Can you see any inclusions in your diamond with a naked eye? If so, it has poor clarity and is not a good investment. GIA also has a clarity grading system that ranges from flawless (FL) to the more prominently included (I3). If you’re not already familiar with this scale, then it is a good time to do your homework, but for everyone else out there, you want to stick with VS2 or better. And above all, always make sure your diamond has a GIA report to confirm.

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