Investing in diamonds is a tricky and intimidating business. Finding a beautiful diamond is easy – investing in one that increases in value while beating inflation, and may help you when the market crashes, may be challenging. The potential pitfalls seem so significant that prospective investors turn away entirely or make costly mistakes. Historically, diamonds appreciate just at the rate money inflates. They are always in demand, can last forever, and hold immense intrinsic value, similar to Gold and Platinum Jewelry. If you’re thinking of investing in diamonds, please read on.
Diamonds as Investment? Know What Makes Them Special.
There may be different reasons why people invest in diamonds. One of the main reasons, however, is because diamonds retain their value over time. Besides, while the demand is ever-increasing, the reserves of supplies are decreasing. For this, the value of diamonds may continue increasing.
Diamonds also store a lot of significance in their smaller packaging. That small storage space holds so much worth, and this makes it astounding. Also, these require no expensive upkeep to maintain the value. As long as you’re using your diamond jewelry with care, regularly checking for loose stones, and storing it safely, they will stay durable and hold value for as long as you own them.
You can hold a diamond, look at it, feel it, and wear it. It appears much safer psychologically compared to other financial items. Not to forget mentioning, in so many cultures often some percentage of wealth is portable. It makes diamonds an excellent means of transfer while also considering them as security.
Valuation is the most significant barrier for people investing in diamonds. We understand that diamonds retain value, but what factors make one diamond more precious than the other. To further know about diamond valuation, understand the 4C’s of diamonds, i.e., Carat, Color, Clarity, and Cut.
Carat: 1 carat = 200 mg and 0.1 in points. This factor impacts the value of a diamond, but it can be deceptive since they look different from all angles and in-store lights. So, stay vigilant when judging the diamond by the way it looks and how much it weighs.
Color: Color grades go from D to Z, where D has the least color and Z contains the deepest hues. When investing in diamonds, look for ones with the least color since most colored diamonds aren’t suitable for investment purposes.
Clarity: The clarity scale refers to the appearance of blemishes or inclusions in the stone under 10x magnification. More than ten different grades go from Internally Flawless (IF) to Included (I).
Cut: The design of the diamond and the way it interacts with light determines its cut quality. A cut may be graded on a scale from Excellent to Poor.
Valuation and pricing may be two significant risks of investing in diamonds. For instance, when you purchase gold, you can quickly look up its prices, compare your options, and seek the standardized value. It isn’t the case with diamonds. To account for this, always buy from reputable diamond suppliers who can offer superior products at exceptionally competitive prices. Insist upon some diamond certification to verify its value.
How to Invest In Diamonds?
Diamonds are more or less a physical commodity you can purchase from any Jewelry Store. Mentioned below are some basic guidelines to make for a smart way of diversifying your investment portfolio and averting any potential pitfalls:
Know the Basics
Start with the 4C’s and refer to as many guides and resources as you can to grasp the diamond language.
Set Your Budget
Before you’re out and about buying your diamonds, know your budget and look for options within the same range. Also, let – buy low sell high – be your mantra. Pay attention to the taxes, retailers’ mark-up costs, and hidden charges to ease your purchase process.
Set Your Expectations
It isn’t a get-rich-quick scheme. Diamonds take time to gain value. Do not expect to invest in diamonds today and sell those on high profits in the next five years. Your money and expectation need to be locked up in a sparky package for a good while.
It may be wise to diversify your portfolio since that helps liquidate portions if you ever need to allocate your investment funds.
Diamond pricing isn’t transparent, but with so many online and offline retailers you can interact with, don’t lose your chance to compare diamond prices.
Try Buying Rare
An investment that’s rare yet desirable makes more sense than what everyone has and makes you compete with many other sellers. It’s like a league of its own, and rarity makes diamonds highly valuable.
Know Your Purchase
Even a minor change can cost you a lot of money, so request necessary certifications or reports to know what you are investing in. It’s also handy when you sell your stone.
Loose Vs. Setting
Not everyone will feel confident about your diamond setting. Buyers might have their specific interests to cater to when you take your diamonds to them. While assessing the price, you might get zero value for your mounting, as most settings accentuate the diamond’s appearance while hiding any inclusions. Thus, accurate diamond grading becomes impossible. As aesthetics may be more prominent with jewelry, the focus with investment lies on a high-quality stone, so loose diamonds do well in the long run.
When in doubt, ask a qualified and knowledgeable gemologist to clear your confusion. Refer to online forums or ask around anyone you feel would probably be able to help you.
Buying diamonds for investment and security is worth your money, provided you’re avoiding the risks. Buy something you love, but rarity may count too. Buy at the lowest prices you can. Purchase a classic yet popular shape. Think about when you might want to sell the diamond and how.
At Diamond Factory Dallas, we believe that any investment involves thorough speculation. So, beware of the pitfalls to minimize risks and make your investment count. Call us at (972) 980-8700 if you’re looking to buy loose natural diamonds, and we’ll help you browse the best from our certified and non-certified inventory.