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Why Invest In Diamonds?
Diamonds have fascinated humankind since the beginning of time. They are precious, rare, mysterious, and beautiful and have come to be regarded as a form of secure investment in financial circles worldwide. The global economy has known many ups and downs. In difficult times, people naturally begin to think of securing their wealth by looking for tangible wealth allocation alternatives. This is when the advantages of physical commodities come into play. In such times, there is an increased interest in gold as well as colorless and colored diamonds. Therefore, investing in diamonds can be a wise decision as they offer the potential for long-term growth and stability in one's investment portfolio.
It is generally agreed that the value of diamonds keeps up with inflation. Let's look at other factors that make them suitable as an investment option:
▪️ Diamond is small but contains a lot of value, making it the easiest form of wealth transfer.
▪️ It does not require maintenance. Diamonds are tough, which means you can wear them while you keep them for investment purposes.
▪️ Demand grows while supplies decrease, which is especially true of the colored diamond market. According to data published by the Fancy Color Research Foundation (FCRF), over the past decade, the lucky few capable of owning these rare stones achieved significant return on investment: the price of a 5-carat Fancy Pink diamond increased by 99% while a 1-carat Fancy Vivid Blue increased by 135%. Fancy Vivid Yellow 5ct and 3ct increased by 30%.
▪️ Diamonds, like gold, are recognized as an alternative currency that holds universal value across the world. However, unlike gold, diamonds are a portable and discreet investment option that can be easily traded and transported
HOW TO BUY
To invest in a diamond successfully, you should commit to learning the basics regarding the diamond quality attributes. You should also speak with a specialist who can discuss with you the best investment strategy. Keep in mind that even a small change in a diamond's specification can mean a significant price difference. The most important factors to consider are:
CUT - Pick a stone that will stand the test of time. Go for a round or cushion cut instead of a pear or heart shape, which are trendier but may be more difficult to resale value in a future market. Cut should be rated excellent or very good. The quality of the cut determines the exquisite brilliance of a stone while the opposite can make a diamond practically worthless.
COLOR - Purchase a diamond within the D-H color scale. The stone should show no fluorescence. For colored diamonds more vivid the color the better, it signifies rarity and quality. Generally look for the most intense colors you can afford.
CARAT WEIGHT - Depending on your budget, Rapaport suggests buying a diamond anywhere from one to five carats. These diamonds are both relatively easy to find and to resell. Remember that in the case of fancy colors such as blues and pinks, the weight can be low and still command a very high price.
CLARITY - Look for an IF-VS1 and nothing lower than SI1. The best color for investment diamonds are the types most common for engagement purposes which are liquid globally and command the biggest market. Those are VS1 – SI1.
CERTIFICATION - Buy only certified diamonds. Investment diamonds should be graded by the Gemological Institute of America (GIA) and confirmed by your expert. While the GIA is the leading grading authority, they also grade substandard and lesser quality stones. For that reason alone have your expert ensure the diamond meets the Rapaport Specification 2+ quality standard in addition to having the GIA grading report.
MITIGATING THE RISKS
One of the disadvantages to investing in diamonds is the lack of price transparency. Simply put, it can be difficult to ensure that you are getting a fair price for your stone. That is also why, when buying a diamond for an investment, it’s a good idea to find out what you would get if you were selling it on the same day. If you are considering to buy, you will have to go through professional traders but you should also aim to get reasonably close to the source price. Moreover, diamond is not a stock and cannot be bought at an open exchange where thousands of buyers and sellers bid online in a transparent platform. There is no definitive price index you can follow as is the case with gold.
While the Rapaport price list is widely used by diamond dealers as a benchmark, it is important to note that diamonds need to be valued individually, making the list insufficient on its own. The price list considers only three basic factors: carat, color, and clarity. The cut, which is perhaps the most important factor in determining a diamond's value, is not taken into account. Ultimately, the real value of a diamond is determined by the laws of supply and demand in the market at any given time. Dealers most often buy and sell above and below the so called Rap price. Also, this price list is set only for colorless diamonds and currently there is no such list for colored diamonds. This is why only a dealer or a jeweler is able to guide a private person in how to buy or sell diamonds safely.
Every investment involves an element of speculation. It is unlikely that the price of the diamond you bought today will spike substantially over the following year. Such investment should certainly be intended as long term. Diamonds are subject to the fluctuations of supply and demand but the rarer the diamond, the more likely it will appreciate in value over time.
If you are interested in exploring the potential of investing in diamonds, you may want to check out our offer of colorless and colored diamonds. Our selection includes a variety of high-quality options to suit different investment goals and preferences.
If you are looking for a diamond or other precious stone of specific parameters, please don't hesitate to contact us at hello@beveli.co. Our expert team can assist you in finding the perfect stone that meets your requirements. Simply send us an email or give us a call, and we will be happy to provide you with personalized assistance.
