9 tips when investing in diamonds

Why investing in diamonds is a valuable idea, can be read elsewhere on this blog. Once you are convinced of the fact that diamonds are a good investment. We would like give you the following 9 tips to guide your search for the perfect stone.

1. Get to know the basics

Start at the beginning and start for white diamonds with the 4 C's. If you have set your eyes on a coloured diamond, inform yourself specifically about it.

2. Determine the budget

Keep in mind that the investment in a diamond is part of your overall investment portfolio. Determine the ratio your diamond can take, compared to the rest and hold on to that.

3. Diversify

Don't put all your eggs in one basket. Even though the famous quote of Warren Buffet "Diversification is protection against ignorance, it makes little sense for those who know what they're doing"… not all of us have the opportunities like Mr. Buffet. If you are planning an investment of € 20.000, consider spreading this over two to four diamonds. Moreover, do not invest in two or three diamonds of the same type. If your heart goes out to a pink diamond, consider as second diamond a blue, green or even yellow one, or another diamond shape or colour intensity.

4.  Compare prices

Diamonds aren’t shares. The pricing is not determined by thousands of buyers and sellers who are bidding online on a platform. Nonetheless, it is possible to compare diamond prices online.

5. Use logic

It does not make much sense to invest in something that everyone has. If you ever decide to sell, this will be more difficult when market supply is high and you are competing with many other providers. However, if you own a special, natural, coloured diamond, for instance a blue or pink diamond, you are playing in a different division. Those are rarer, more sought after and therefore easier to resell. A white diamond can also be very rare, especially the DEF colour with IF-VVS1-VVS2 purity.

6. Only buy certified diamonds

That's just the basic rule. Only buy diamonds with GIA certificates. This is the most famous and strict label. When it is time to sell your diamond again, your buyer will want to see a GIA certificate.

7. Loose or mounted?

The moment you wish to liquidate your diamond investment again, the potential buyer will also have his own agenda. Like you, he or she will buy as an investment, but most likely he or she will have own dreams about the setting. Therefore, your setting is of no value to another buyer and only the diamond itself will be taken into account to determine the value.

Does this mean your investment diamond should not be placed in a jewel? Not necessarily. Not everyone can constitute a good picture of a loose diamond. A well thought setting might possibly be a way to resell your diamond. Good settings can, for example, emphasize the colour.

8. Buy your diamonds at their best price

Buying from a retailer means that you are buying your diamond after a series of brokers and middlemen have also received their fair share already. With ‘buy your diamonds at the best price’, we do not mean you should buy a ‘cheap diamond’ (on the contrary). This means that you should buy as close to the source, where diamonds are cut, like at BAUNAT.

9. Don’t be shy.

Ask lots of questions. Consult diamond experts. Use diamond forums. We live in an era of 'sharing'. Social networks are the ideal way to test certain things. You will sure find experienced diamond investors, who can provide you with additional advice.

Author: San Meuleman

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