Investing in diamonds is nothing new. Certified diamonds are a rather stable, profitable investment. Naturally, if you want to prevent making some common mistakes when buying diamonds, some prior knowledge is required. Take these 5 features into account and learn how to invest in diamonds.
Why certified diamonds?
Unfortunately, there are also conflict diamonds on the market, which are mined illegally. The certification system was established to end the practice of these blood diamonds. Therefore, it is important to invest in honest and certified diamonds. Less conflict means more prosperity.
Start at the beginning: the 4 C’s
These are the absolute basics for who wants to invest in certified diamonds! The quality, and thus the value of your diamond too, is translated in carat, colour, clarity and cut. On the diamond’s certificate you will find a lot of information based on these 4 C’s. Learn the language of the diamond dealer. The GIA certificate is worlds most respected and neutral scientific assessment with regard to the diamonds quality and authenticity.
Rare but desired
Learn how to buy and sell diamonds. Invest in diamonds that are certified, which are on the one hand very rare but on the other hand in high demand. When you are investing, you aim for profit and so you want to be sure about the saleability of your investment.
The importance of diversification
Don’t put all your eggs in one basket! When starting to invest in certified diamonds, you have to understand the importance of diversification. This way, you can spread the risk that comes with all investments, regardless de relative certainty certified investment diamonds can offer you. Or, as the American business man and investor Warren Buffet said: “Diversification is protection against ignorance”. In principle, no more than 33% of your investment portfolio should consist of diamonds.
Loose diamonds versus diamond jewels
In general, for diamonds set in jewellery, different diamonds are used than the ones sold as investment diamonds. It is also practically impossible to grade a diamond in its setting.
That is why we emphasize again the importance of the certificate. The diamond of the highest quality is not necessarily the best investment diamond. Opt for loose certified diamonds with an ideal price-quality ratio when starting to invest.