- Inappropriate quality
- Inappropriate colour
- Inappropriate weight
- Inappropriate proportions
- Inappropriate origin
Diamonds are particularly emotional goods. An occasion to buy a diamond is usually an engagement, a wedding, a birth… However, if you consider buying diamonds as an investment, other factors come into the picture. This type of investment should be approached rationally. What do you have to watch out for to avoid making an emotional purchase, rather than a rational one? Here you can find the 5 most common mistakes. There are 5 criteria that make the difference between a diamond that shines on your fingers and a diamond that also shines in your investment portfolio.
Diamonds come in many different qualities. You might think diamonds with the highest quality are the most interesting ones to invest in. Does this hold true? The quality is indeed a very important factor in determining the value of a diamond. Thus the higher the quality, the more expensive the diamond is. But diamonds of the highest quality are not necessarily the best diamonds as an investment. Go for the optimal price-quality ratio. The additional charge for a diamond of the highest quality is not a small one. From an investor’s point of view, it is therefore not necessarily the best option. If you would like to invest in diamonds, we advise you to go for larger diamonds.
In a previous article, we already discussed white and coloured diamonds. “The whiter the diamond, the more valuable it is.” This is correct, but “whiter” does come at higher price. As an investor it is not wise to cough up the additional charge for the ultimate colourless diamond. Therefore, do not pay needlessly more for the most colourless diamond. Some coloured diamonds – the fancy coloured diamonds – get a higher market value because they are rarer than white ones and the demand in colourless diamonds is rising.
‘The bigger, the better, the more expensive’… This does not entirely hold up for investment diamonds. When you buy diamonds as an investment, the weight, expressed in carat, is a very important factor. Make sure not to buy excess weight, which would land you in a higher price category and you would need pay needlessly more for almost the same diamond. As an investor, you better opt for diamonds weighing between 1 and 5 carat. Keeping reselling in mind, it is inadvisable to go for diamonds of a higher carat weight.
If a diamond does not have the right proportions, then it will appear dull and may even display a “fish eye” – a black spot in the middle – which will not result in optimal brilliance. If you buy diamonds as an investment , make sure the proportions are VG (Very Good) at least.
You can buy diamonds at many different locations, from many different kinds of suppliers. When buying diamonds as an investment, the source is the most important factor. The farther away from the source (the place where diamonds are cut) you buy, the higher the chance your future profits will disappear in the hands of “middle men”. BAUNAT DIAMONDS prices her diamonds according to their underlying investment value. This is possible because they buy their diamonds directly at the source at the best possible price and sells them online, or in their offices on appointment directly to the consumer.
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