The 3 most common mistakes when you are investing in diamond

  • Paying too much for diamonds
  • Too big expectations of the investment
  • Buying the wrong type of diamond

Investing in diamonds is still one of the most interesting investments on the market. Investment diamonds have a high intrinsic value, there is always a high demand and they remain forever ('Diamonds are forever'). In addition, diamonds are (usually) small, portable and easy to store, in contrary to, for example, crude oil. Investing in diamonds is however not easy. Gold, for example, is expressed in weight and the value is calculated based on that. The value of diamond depends on multiple factors that can influence each other. Every diamond is different and that is what makes investing in diamonds challenging. To address this challenge well, we would like to warn you for some common mistakes.

Paying too much for diamonds

The mantra ‘buying cheap, selling expensive’ applies in all sectors, but it is sometimes difficult to apply on investment diamonds. It should be considered that investing in diamond brings additional cost that you have to pay. Firstly, there is the VAT that must be paid in addition to the cost of the diamond. This means that the value of the diamond must grow to an extent that the VAT costs are exceeded for a break-even. Buying VAT-free is possible at BAUNAT DIAMONDS, check out the possibilities here. Obviously, insuring the investment diamonds or processing them in jewelry also involves additional costs.

Too big expectations of the investment

It is almost impossible to get a huge profit from the investment diamonds in a short term, so it is not realistic to buy a diamond today and sell it again with a big profit within five years. It takes time for a diamond to increase in value, but many investors are still disappointed when they do not see big results in a short term. Therefore, it is recommended to buy a diamond that you love and enjoy if the investment does not yield a quick profit.

Buying the wrong type of diamond

The third and biggest obstacle with investing in diamonds is knowing in what types of diamonds you can best invest. Certain types of diamonds are easier to sell, so investing in one of these types will simplify the sales process in the future. The quality rule is the most important in the selection process: always buy the best quality! The biggest diamond is by no means the most valuable. Always take into account the cut, colour, clarity and carat weight(the 4 C's). Finally, it is very important to only buy certified diamonds, whether it is for an engagement ring or an investment.

In view of these and other common mistakes, it is recommended that you are assisted by experts with knowledge. Feel free to contact BAUNAT DIAMONDS.

Author: Daan Deruyter

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