Diamonds are a good option if you’re looking to diversify your portfolio in an aesthetically pleasing way. An estimated 93% of couples that marry do so with a diamond. Demand for them is ever present. However, no matter their sentimental value, not all diamonds have a resale value. Here, we take a look at the kinds of diamonds that make a good investment.
Loose Cut Diamonds
The most important thing to consider when buying an investment diamond is the quality of the stone. Quality is commonly expressed as the ‘4 Cs’. The 4 Cs are Colour, Clarity, Cut and Carat . The 4 Cs have a direct impact on the worth of a diamond, the acquisition price and its resale value over time.
Go big and go pure when investing in a loose stone. Larger diamonds are rarer, and large pure diamonds are the heavyweights on the investment market.
Expert Tip: Protect yourself from fraudulent sellers or appraisers. Make sure all the investment diamonds you buy are certified. International certification by an organisation like the highly respected EGL (European Gemological Laboratory) is crucial. All Afrogem diamonds come with EGL certification.
Many people are unaware that diamonds exist naturally in a range of colours from clear to black! However, coloured diamonds are extremely rare. The more intensely coloured the diamond is, for example a deep pink, the more valuable it is. Only 1 out of every 10,000 diamonds is a coloured one. Demand for them rises yearly. Recently, the Asian markets have shown a particular interest in coloured diamonds. If you come across one that scores high in the 4 Cs, snap it up immediately.
Pink diamonds are prized for the romantic connotations they hold. Celebrity Jennifer Lopez was given a 6.1 carat pink diamond estimated at $1.2 million at the time of her engagement in 2002.
Expert Tip: Not all yellow diamonds are created equally. Fancy yellows are good investment diamonds. Discoloured diamonds that reflect a yellow hue are not.
The term solitaire refers to a single, cut diamond. Solitaires are a good investment choice for a couple of reasons. If a diamond is in a ring setting, most sincere diamond buyers will ask for the setting to be removed to thoroughly inspect the stone. Since a solitaire diamond is unset it avoids this extra step.
In addition, buyers view them as versatile. Prospective buyers can imagine them in a pendant, as a ring or gracing a crown. Plus, solitaire diamonds can be cut into a variety of shapes.
Rough and Uncut Diamonds
As the name suggests, these diamonds have been neither polished nor cut. They may look like dirty or glassy stones to the untrained eye. The investment strategy is different for rough diamonds as most do not go on to be jewellery. They are more commonly used for industrial purposes, like being placed in machinery to cut materials. So their strength and size are valued over their looks.
Unfortunately, uncut diamonds often enter countries illegally and have murky origins. They may not have been handled according to The Kimberley Process. These could still be a good investment option but require more expert knowledge than a first-time investor usually has. Rather buy your investment diamonds from a reputable company that guarantees conflict-free stones. Like Afrogem.
Overall, diamonds make a lovely tangible mid to long-term investment. They can be worn and enjoyed while accumulating value and have a good return on investment (ROI). When you buy a quality gem, you also have the security of knowing it has universal value and can be traded internationally.