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Where does a diamond get its investment value?

  • What decides colourless diamonds’ investment value?
  • Why would I buy coloured diamonds?
  • Which other factors are important?

Diamonds have been highly coveted for centuries, but their value really skyrocketed thanks to De Beers at the beginning of the 20th century. It has steadily increased since then, a trend which continues today. What makes diamonds so valuable? Why should I buy diamonds as an investment?

What decides colourless diamonds’ investment value?

Colourless diamonds draw their value from the well-known 4 C’s: carat, colour, clarity and cut. The interaction between the different factors decides their value as a whole across the globe. That means that contrary to popular belief, diamonds do have a constant objective value which evolves in concert with the market, just like every other investment. When you want to buy diamonds as a first investment, the certificate specifying the 4 C’s is the most important factor. It guarantees that you get what you pay for and will prove invaluable when liquidating your diamond investment.

Make sure you buy your diamonds from diamond investment experts highly familiar with the market prices. They will introduce you to the diamond industry from an investor’s point of view and make sure that you invest smartly.

Why would I buy coloured diamonds?

Coloured diamonds play in a league of their own. Since they answer to completely different standards than the colourless type, your certificate will not mention the 4 C’s. Instead, you will receive a fancy colour report based on 3 factors: hue, tone and saturation. GIA recognises 27 different hues in a wide range of possible colours. Saturation is used to express the intensity of the colour. Coloured diamonds have been on the rise for quite some time due to their heightened use in jewellery and interest in coloured engagement rings from celebrities.

That popularity makes coloured diamonds a slightly bigger investment, but also a more lucrative one. They are particularly valuable as a second investment in diamonds.

Which other factors are important?

A diamond’s investment value lies not only with its position in the market, but also draws from emotional value. A highly qualitative diamond will always fetch a high price, but personal history increases that base value. Pieces passed down from generation to generation or set in diamond jewellery add to the elusive and romantic character of a diamond investment. Ready to buy diamonds? Then start by adding smaller loose diamonds to your portfolio and choose higher value pieces once you are more familiar with the diamond market. As with any investment, diamond investment values require expert knowledge slowly built with experience and support from professionals in the business.

Where can I buy the perfect diamond for my portfolio? Who can help me get acquainted with the diamond market? Contact the diamond investment experts at BAUNAT DIAMONDS for professional support.

Author: Inge De Wee
Source: BAUNAT

With this article, BAUNAT strives to inform you thoroughly about investing in diamonds. No investment can be guaranteed to be without risk or fully according to your expectations. That is why we recommend to research the risks and aspects of investing in diamond properly to ensure that you make the right choice for your portfolio.

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