The logical progression would be to share tips and tricks for those who want to start investing in colored diamonds. So we've compiled a list of 6 diamond investing tips that every beginner should know about.
In this article, we'll go over the 6 essentials for investing in fancy colored diamonds, including:
- Portfolio diversification
- Quality and rarity of the diamond
- Market demand for the specific diamond
- Diamond Certification
- The importance of asking questions
1. Learn about alternative investments
This may sound like common sense, but it is very important and must be said, especially in the case of high-value, long-term investment assets such as colored diamonds. Be sure to teach yourself on the terminology utilized by vendors, auction houses, and gemologists. The most important thing is to fully understand what each of the 4 C's in a diamond means and how they contribute to the value of the stone.
2. Diversify your diamond portfolio
When it comes to investing, experts always emphasize the importance of diversifying your portfolio. This is also the case when investing in diamonds. While it may be tempting to spend your entire budget on a beautiful stone, it is often wiser to split it up, buying 2 or maybe even 3 diamonds.
Also, make sure that the diamonds you are investing in belong to different color categories. For example, let's say you have a budget of $ 30,000. Instead of buying a $ 30,000 diamond, consider investing in a $ 15,000 blue diamond, a $ 10,000 pink diamond, and a $ 5,000 yellow diamond.
Portfolio diversification could be a smart move because it allows for greater flexibility. The demand and value of certain colored diamonds may increase in the future, which also increases your chances of obtaining a higher return on investment. Also, if you ever need to allocate mutual funds, a portion of your diamond portfolio can be liquidated (rather than having to liquidate all or your investment).
Additional note: the value of pink diamonds has been showing exponential growth over the past decade, with pink diamond prices seeing the highest appreciation of all other categories of colored diamonds.
You may also refer to our pink diamond shop.
3. Invest in colorful diamonds with rare attributes
If you want your investment to have value (especially if you plan to liquidate or sell your stone later) be sure to buy something rare that has unique characteristics. You want a stone that cannot be easily found by others on the market. A pink diamond with decent clarity will attract significantly more buyers' attention than a colorless or yellow diamond of the same gauge. Also, an internally flawless vivid and elegant yellow stone will certainly justify higher demand (and price tags) than a yellow diamond with inclusions. Pay close attention to the 4C's and focus on getting a stone that grabs the attention of others.
4. Your alternative investment must be desired by others
Don't invest in a diamond just for the sake of having it. If you plan to liquidate your asset in the future, you will need to make sure that others want it. For example, a blue diamond, although rare, may not attract much attention if it has unfavorable undertones (e.g. gray) or an unwanted shape (cut). Do a little research on each type of diamond, find out which cuts are most popular, and understand how modifiers and shades affect its appeal and value.
5. Buy only diamonds that are certified
Often the inexperienced eye or inadequate lighting can lead to deception. Diamonds are a high value investment with small details that can significantly affect their price. For this reason, it is highly recommended to always request the certification of the stone before purchasing it. More specifically, choose GIA certified diamonds.
In addition to guaranteeing the quality of your investment, it will also assure the prospective buyer that the diamond you are buying is legitimate (if you ever decide to sell it).
6. Ask lots of questions
Before making your final decision, do some more research. Visit diamond forums to see which stones are in high demand, how the market is moving, and read stories from people who have recently made investments. What type of stone did they invest in and why? If possible, even try finding and contacting diamond experts and investment consultants for more advice.Diamonds are an important investment, the more you know about investing, the better equipped you will be to make a great decision.