Diamonds have long captivated us with their rarity, beauty and symbolism. Beyond their aesthetic allure, many people wonder if diamonds are a smart investment choice.
If you search online for an answer, you’ll be exposed to plenty of conflicting details. So, once and for all we have listed the answers to all the questions you might have when investing in diamond.
Should you invest in diamonds?
Yes! Over the past few years, diamond has become a popular investment choice. Whether you choose to buy a diamond ring or loose diamonds, you’ll never regret your decision of investing in diamonds. Let’s tell you why.
7 reasons why you should invest in diamond
- Low volatility
As compared to silver or gold, diamond prices are less volatile, making them a safe investment bet. Another best thing about diamond is that it offers price stability even when the economy is undergoing a crisis. If you buy a diamond and hold on to it for a while, it is almost certain that it will be worth more when you sell the item.
Diamond as you know is the hardest substance on earth so you do not have to worry about its durability. All you have to do is make sure that you don’t lose it!
- Enjoy it while you have it
Even when you buy diamonds for investment purposes, you can still wear and flaunt them.
- Global Currency
For decades and centuries, diamonds have been accepted as a global currency. They can be easily exchanged for services and goods. You can even sell your diamond to generate quick cash.
- Portable Wealth
Diamonds serve as portable wealth that one can easily pass down to future generations. They are a meaningful way to preserve wealth and are often cherished heirlooms.
- Inherent Desirability
Diamonds for their inherent appeal have a universal desirability, which further contributes to their market demand. This also enhances their investment potential, making diamonds an attractive investment option for many.
- Diversification of Portfolio
Instead of investing your entire fund in a single asset category, it is always recommended to diversify your portfolio for better results. Diamonds can be an effective option, offering a hedge against market volatility.
Do diamonds appreciate in value?
Historically speaking, diamonds have demonstrated appreciation in value over the years. They either retain a certain market value or increase over time. This is because of their finite supply, which further reminds us of the fundamental law of demand and supply.
However, it’s important to know that the prices of diamonds can fluctuate in the short term due to various additional factors. Moreover, if you’re looking to invest, you should consider investing in a certain category of diamonds to reap the best result (more on this later).
How to invest in diamonds?
There’s more than what merely meets the eye. Diamonds are challenging to work with if you’re unaware of their intricacies and the market cycle. If investing in diamonds piques your interest, you must know how to invest effectively and efficiently.
- Rarity: Diamonds are rare and this scarcity can potentially contribute to an increase in demand over time. Therefore, to make the most out of your investment, invest in a rare piece.
- Growing market demand: Demand for diamonds is evergreen. But it is best to invest in a style that drives more popularity than others. This can positively impact the value of your diamond.
- Quality & the 4C’s: The value of a diamond is influenced by the 4 Cs: Carat, Cut, Clarity and Colour. High-quality diamonds with excellent craftsmanship and superior characteristics are more likely to appreciate over time.
- Long-Term Investment: When considering diamond appreciation, it’s important to take a long-term approach. Short-term fluctuations may occur for various reasons. But as per data, the prices of diamonds have generally increased over extended periods.
- Professional Certified Diamonds: Invest in certified diamonds, such as diamonds that come with a GIA (Gemological Institute of America) certificate. This ensures the diamond is authentic and can positively impact its value.
- Set a budget: The first rule of investment is buy low, sell high and therefore, you must set a budget. Remember that investing in diamond jewellery or any form of diamond should be a part of your portfolio and not your entire portfolio. Therefore, make sure you don’t go over the budget when investing in it.
- Choose a setting: You can buy your diamond in two ways: loose or mounted. While loose diamonds are more practical and evaluators can quickly inspect them to provide a price, you cannot wear your investment while you have it. On the other hand, you can make the most out of your investment with a mounted diamond jewellery piece. If the main focus is on investment, consider the former.
- Bigger the size, the bigger the return: Diamonds are thought to be worth less or more based on their carat weight and size. So, it is better to invest in a larger stone with good quality for securing higher returns.
What type of diamonds appreciates in value?
As said earlier, not all diamonds appreciate in value and few certain types show a higher potential for value appreciation. Here’s a list of all of them.
- Diamonds with Higher colour grades
Diamonds with higher colour grades such as fancy coloured or colourless diamonds with few internal flaws or inclusions are often more valuable and sought-after by collectors.
- Natural fancy-coloured diamonds
As the name suggests, natural fancy coloured diamonds such as pink, blue, red, yellow or green diamonds are incredibly rare and highly desirable. The limited supply and unique hue of these diamonds lead to their value appreciation with time.
- Investment-Grade diamonds
Some diamonds are particularly categorised as investment-grade diamonds possessing exceptional characteristics like excellent clarity, ideal cut and outstanding colour. These diamonds are potential investment choices and are most likely to appreciate in value in comparison to the lower-quality ones.
- Rare diamond shapes
While round brilliant cut diamonds are most popular, any unusual or rare diamond shape like the radiant, cushion or pear offering a distinct appeal may have increased value appreciation over time.
- Vintage diamonds
How to get the best price for your diamond?
Now that you know the reality of the diamond market and how you should invest, we will tell you how you can secure the best price when selling your diamond.
5 Tips to sell your diamond for the best price
- Professional Appraisal
Start by getting your diamond appraised by professional appraisers to get an accurate assessment of your diamond’s quality and value. As an expert in the second-hand diamond industry, Lux Brokers will help you find out the most accurate value of your diamond quickly.
- Do some market research
Before you visit any professional appraiser to sell your diamond, it is best to familiarise yourself with the current diamond market trends, demand and prices to ensure you get the best deal.
- Present your diamond well
Clean and prepare your diamond to attract potential buyers. A well-maintained diamond with a sparkling appearance is more likely to attract buyers and command a higher price than ones kept in poor condition.
- Box & Papers
If you own some branded diamond jewellery like diamonds from Tiffany & Co or others, you’re most likely to receive box, papers, receipts or invoices with the item. Presenting all these documents when you sell your diamond will add to its overall worth.
- Having the diamond certificate
Diamond certificates mentioning key information about your diamond such as its 4 Cs, symmetry and other details is more likely to provide you with a better return. This includes the GIA certificate or any other diamond certificate type.
While diamonds have shown a tendency to increase in value over time, it is crucial to approach diamond investments with a comprehensive understanding of the market. Several factors can influence the appreciation of the diamond pieces and the final price that you get when selling your item.
To make an informed decision, it is best to seek advice from professionals and diamond experts. Whether you’re looking to invest in diamond jewellery or sell your diamond, Luxbrokers can help you both ways while ensuring strong prices and a quick selling process. Our team of diamond experts has the right knowledge and expertise to guide you in taking the best investment decision.
Get in touch by calling 020 7123 5081.