Diamonds as an Investment: Tips & Basics

Glittering atop fine jewellery and sparkling on our hands, we often think of diamonds as valuable yet merely beautiful creations that are a blend of nature's creations and man's crafting. However, diamonds are also becoming pretty popular tools for investment purposes as well. It is not the jewellery, the precious metal used, the brand or the store name, but quite simply the stones that offer a viable investment tool. They are even purchased to pass down as heirloom assets that go down one generation to the the next. If you are looking to purchase a diamond as an investment, loose diamonds from New York or other diamond capitals of the world will give you much more value for money than purchasing from a retailing jewellery store.

Loose diamonds are also a better way to save money on diamond jewellery itself, since it often costs less to purchase a loose stone separately and then have it fitted and designed into a piece of jewellery, experts say. This can effectively cut out the margin retailers put on the stones since you will be able to shop for the diamond yourself and compare prices from various sources.

Let us take a look at a few basics when it comes to purchasing loose diamonds -

Educate yourself about the 4 Cs –There is no point buying premium loose diamonds in New York or elsewhere if you do not know what exactly you are purchasing and why the stone is priced the way it is. A buyer be it for investment purposes or for jewellery, must know what the basic four C's of diamond shopping are and how they affect the quality and valuation of the diamond. The carat weight, cut, colour and clarity all play a huge role in what your diamond will look like and will be worth. Carat is the weight of the stone and often a good indicator of the size as well. The colour of the diamond will range from entirely colourless to those with less than perfect colourlessness; and off course you will also find a variety of naturally coloured diamonds like blue, pink, yellow etc. 

Clarity is the absence or presence of natural inclusions and flaws within the diamond, with a flawless one being the most desired. And the cut is how the diamond is faceted and also can indicate shape like a brilliant round cut, emerald cut, princess cut and more. Educate yourself well. Strangely enough medium quality diamonds are said to be easier to sell rather than the absolutely premium ones, since those will have a very limited buyer base. 

Purchase single stones – Sometimes people purchase a diamond jewellery set thinking they can sell it at a future date when the prices go up. However, rather than buying sets, from an investment point of view it may be a better idea to buy single stones, as these are easier to sell and price. 

Check for authenticity – Whether you are buying from a store or an online retailer always checks for authenticity. Ensure that you procure a certificate and a stamp of authenticity from a known standardising body. Opt for reputed sellers who know the business, whether online or not.