Is Diamonds a good investment? The opinions go apart. However, this post will give you some advice on how to invest in diamonds. So if you are interested and positive about diamond investing keep reading, as we will go over the most important things to consider before you act. Ok, with that being said, let´s begin!
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Ok, with that being said, let´s continue with the article.
How to invest in diamonds – Top 5 tips
So, how to invest in diamonds is the question we will answer here. It is really not as complicated as it might sound, it works pretty similar to investing in anything. However, below I will list all the top 5 things to consider before investing in diamonds. Ok, without any further due, let´s begin:
Tip nr 1:
(Basics for Diamond investing)
Before you start investing in diamonds you need to make sure that your investment meets this minimum requirement:
- Price transparency
- Resale liquidity
- Market access
- Quality certification
- Expert guidance
Your diamond investment needs to be bought at a price that is (more or less) close to the price you can easily resell it with. It is NOT a good idea to buy at retail and reselling at wholesale. The best thing you can do is to connect with an expert that can give you direct access to international dealer prices and markets.
You also want to confirm the quality of your diamonds through independent third party grading confirmation experts. There are many benefits to that, one clear one is that they can advise you on both timings, and also handle your transactions and having quality control.
Tip nr 2:
(Invest in the basic stuff)
Beware of large and fancy colored diamonds! Sure, they attract super-wealthy collectors and draw the attention of billionaire investors, but as long as you are none of that I advise you to stay away.
Well, because of the simple reason that their pricing is extremely speculative and also, they tend to be difficult to resell.
Normally it is recommended to invest in round, 1,01 to 1,49 carat, D-H color, IF-VS2 clarity, Excellent to very good cut as this diamonds trade on a daily basis, the prices are well-known and easy to both sell and purchase.
Your investment (depending on budget) can also include additional sizes such as 0,51 to 0,69 carat, as well as 2 carat to 5 carat.
To keep it simple: Even if various investment portfolios use different sized diamonds, the general recommendation is to invest in well-defined and standardized round diamonds as described above.
Tip nr 3:
You want to grade your diamonds by the GIA (Gemological Institute of America) and also get a confirmation from your expert.
The GIAs primary task is to grade authority, they grade all types of diamonds, even standard and poor quality ones. Keep in mind that even if a diamond has a GIA report, it doesn´t automatically mean it is a good diamond.
What you should do is to make sure your expert ensure that the diamond meets the required specifications (as above) in addition to having a GIA grading report.
Tip nr 4:
You should never pay more than around 2-5 percent in transaction costs when you invest in diamonds. You need to investigate the bid/ask spread (price difference between buying and selling prices for investment diamonds).
When you buy a diamond as an investment it is always a good idea too, in the same time, also look up what you would get if you were going to sell your diamond the same day.
Tip nr 5:
(International markets and Expert Advice)
The last advice is also the most important one. You need to find a company to trust with your diamond investments, a company that will be fair with you and not rips you off.
I would recommend that you establish a relationship with a diamond investment advisor that is knowledgeable in the nuance of diamond quality and also on the international pricing and markets for diamonds.
If he (or she) also got access to the global diamond markets (in order to get fair market value bid/ask pricing) then it is an even better match.
Ok, I think that sums up the top 5 most important things to consider before investing in diamonds. Below you got a company that got some clear benefits and also is the #1 rated one online by its clients.
Would highly recommend that you check that one out if you are in search of a reputable and transparent dealer with very competitive prices:
Hope you found this short article on how to invest in diamonds to be helpful and now you should have a better understanding of the subject. If you got any questions about this I will be more than happy to answer them below.
I wish you success!
Founder of: Gold Retired