How to Invest in Diamonds

Diamonds can be a really good investing opportunity.

They are tangible, portable, liquid, and investments on them can be made privately. Their value is based on rarity, only fluctuating with the discovery of new mines and sources. As a result, it doesn’t decrease as easily as investments in real estate, for example. Here are a few facts to help you get started in diamond investing.

  1. The most common use of diamonds as an investment is as insurance against the unexpected. Professionals of high liability buy important diamonds and subsequently hide them offshore as a private source of wealth that courts will be unable to confiscate in the occurrence of a civil lawsuit. It can also be passed on to their children quietly as part of an estate, if the diamond in question is never used.
  2. White diamonds that cost $50,000 or lower at a true wholesale price are not considered rare enough to be investments, except in markets that exhibit extreme inflation of currency. If you wish to make a profit and re-sell the stone easily, you must buy a beautiful, rare stone and consider the timing of your resale. Make sure that there are more buyers available than diamonds.
  3. It is essential to have knowledge in diamonds to begin with before choosing to invest in them. Learn about the four C’s of diamonds: cut, colour, clarity, and carat. These factors determine and influence the value of a diamond.
  4. Determine if you wish to invest in loose diamonds, or diamond jewelry. Chances of resell on loose diamonds are higher, because in this case you won’t have to look for someone who won’t like the setting. Diamond jewelry, on the other hand, can be used or worn without its value being diminished in any way.
  5. Fine, large diamonds in the 5+ carat range can be very acceptable long-term investments, but the stones with the best appreciation track record are natural coloured diamonds, like yellow, pink, blue, green, purple, and red. These stones have never fallen in price, even since serious recording of it. During times of recession, the price only moves laterally. In times of inflation, they can only go up. Blue diamonds have approximately doubled in price every 5 years, pink diamonds have doubled in price about every 6-7 years, and yellow diamonds have doubled in price about every 8-10 years since 1970. These diamonds are hundreds and thousands of times more rare than the finest “D” color diamonds.
  6. Remember to check for certification each time you buy a large, important stone from EGL or GIA. This assures you of the pedigree of the stone, as well as assurance in the future when the diamond changes hands for your buyer.

Author Bio: George is an advertising consultant for Brilliance, an online jeweler who specializes in loose diamonds and engagement rings. 

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