Diamonds are the most sought-after gems in the jewelry world. Their rarity in brilliance and color has captured the hearts of many. As much as we love to wear them or gift them to our beloved, it’s no secret that they are truly dear in price.
Some buy them for their potential future value hoping to get something out of them in later years but is buying diamond jewelry a good investment?
Commonly gifted in engagement ring pieces or family heirlooms, diamonds shine and dazzle with a brilliance that steals our hearts and money away. Gifting puts smiles on our significant others face every time they see it and fill our hearts with joy to see them so happy.
Other than it being a great investment in terms of emotional and aesthetic significance, it is not yet clear if it qualifies as a valid financial investment.
Is Buying Diamond Jewelry A Good Investment?
Many financial professionals will discourage you from investing in gold for profit. Based on present circumstances around diamonds, it doesn’t look all that good, and here’s why.
Dropping prices going value of diamonds has been steadily decreasing over the years. There has been a recent influx in the production of certain diamond grades which has resulted in a price drop.
White diamond gems are most affected by this especially because of the rise in simulator diamond crystals which has also taken the demand away from the expensive diamond.
Financial analysts expect this trend o prevail over the next couple of years. People have discovered beauty in other gems such as ruby and sapphire which are rare and very colorful and not as price as the diamond.
Buying your diamond gem expecting a huge payout in the future is based on probabilities with the projections looking a bit dim in some light.
As with any other product in the market, diamond market value at retail includes way more than just the quality and size of the diamond. mostly set on gold metals, the value of the gold is also factored in plus the goods and services tax and of course the making charges that facilitate the processing of your diamond to the final product that you are about to purchase.
Keeping this in mind, when its time to hand in your jewelry to a pawn shop or another buyer, remember that you may never get back the same amount or even close to what you paid for in the beginning.
2.Lack of Market
It is really difficult to sell an old diamond unless it is exquisitely rare. Your engagement ring could be rare in design but the diamond cut, size, and quality could match another ring of a much plainer design. You may pay more for the design but it doesn’t make the stone any more valuable.
When buying your ring or any other diamond jewelry piece, make due diligence in looking into the true value of the diamond and its characteristics, grade, and cut. Aim for a bigger stone past the 1-carat mark. it may cost you more than you expect but that is the only way to secure your future investment.
When it comes to diamonds, people are drawn to their rare cut, color, karatage, and clarity. If nothing is outstanding about it, you are not likely to get any bids.
Unlike metals like gold which can be melted into a liquid form and either formed into another item or stored away as monetary value, diamonds have no such quality.
The best that can be done is to polish the gem to retain its sparkle.
However, the older a diamond gets, the more it loses its shine and dazzle. Some people like this and will buy them for this very reason. The majority, not so much.
Why Diamond Jewelry is a Good Investment?
Dispelling the naysayer’s idea that diamonds are a terrible investment, there is a huge population with the opposite view.
This crowd affirms that with a good plan, knowledge, and expert advice, you can turn your fortunes by investing in diamonds.
All you need to remember if you decide to take them on as investments are that you will not receive an immediate income from them and that you will have to invest more in cash to get a valuable diamond that can get you profits in the future.
As mining continues non-stop and population growth increases pressure on demand for diamonds, it is obvious that one day the rough stone will one day cease to exist.
With this knowledge, you could invest in diamond pieces that are rare, big, and have more than 1 carat.
If mining someday stops, diamonds demand will automatically rise. That time is when best to sell your gem being sure to get a great payout for your strategic purchase and years of patience. This could be over 50 years in the works.
2.Form of Currency
You can use diamond as a form of currency which comes in handy especially in times when there is inflation.
A diamond retains its value and is not affected by inflation. Most people prefer investing in diamond considering it safer than stocks and bonds.
Its unchangeable nature makes it ideal for storage with no possibility of damage to it.
Diamond Jewelry Buying Tips
What you need is to prepare your mind with information that will help guide your decision on the best diamond piece to invest in.
1.Understand how to tell the Value
Diamonds are classified and valued based on their cut, clarity, carat, and color. You must do some homework online before heading out to see what is in the local market.
The fewer imperfections in the crystal the better clarity it will have.
The diamond’s cut is responsible for the gem’s brilliance and shine. The measured weight of the diamond is its carat and with color, the whiter the gem, the higher the value it carries.
2. Check Your Finances
Choosing to invest in diamonds should not be a first-time investment but as one of the many other investments that you dabble in aside from the more reliable investments like real estate and company stocks.
So, this investment should come from a fund you will not miss anytime soon because it will take a long time to get it back.
Add to this knowledge the fact that it will cost you dearly because you cannot invest in any flimsy stone or popular cut and expect it to be worth much later on.
Pile on the funds towards this investment to make a purchase of the rarest gem in terms of cut, carat, color, and clarity that you can find.
3. Ask for certification
The worst mistake you can make in jewelry shopping and especially a valuable purchase such as a diamond ring is failing to ask for a certificate of quality from the jeweler.
These certificates are awarded by the Gemological Institute of America (GIA) which is the globally affirmed gem accreditation agency.
This certification will confirm to you all the qualities that your jeweler insists are in your diamond gem.
This certification will come in handy when proving the authenticity and value of your diamond years to come so keep it safe.
4.Seek Expert Opinion
There is no way all your research will turn you into a gem professional.
With new and unfamiliar terms in carat, clarity, cut, and color of the gem, it is best to consult an experienced and trusted eye to have a look at your piece just as a second opinion on the value of your gem.
Experts can check for more than you can and they will help you buy a great quality diamond at hopefully a lesser price giving you greater confidence in your investment.
5. Consider the metal Set
As a piece of jewelry, the metal that your diamond will be set on is extremely important as it adds value to your jewelry.
Go for white, yellow gold, platinum, and titanium metal sets as they give the best bang for the buck.
Also, this material should be as hardy and durable as your diamond for it to maintain its glossy finish.
6. Make the Purchase
You may be buying from a physical shop or you may be doing it online.
Either way, countercheck all your details, payment details, and diamond jewelry specifications.
Important also would be to note return or money-back policies for online stores. They are mostly about 30 days long.
Given that you take your time considering the financial implications associated with taking up diamonds as an investment option, you may very well be successful at it.
What you will expressly need is a very large sum of disposable income or savings to make your first purchase to avoid narrowing down your choices.
Aim to purchase a big, colorful, rare, and spectacular diamond gem that will be worth a fortune hopefully in the next half-century.