5 Top tips in Investing on Diamonds

Published On : 11/09/2020

Investing in diamonds can be extremely rewarding if you know what to look out for. However, for inexperienced investors, putting your money where your mouth is can be quite daunting!

There are some obvious key rules when investing in diamonds. For example, even the most beginner of investors will ask themselves, what’s the overall condition of the stone and the jewellery? Is there history behind the item in question? Will this diamond keep it’s value over time?

Using logic plays a big part in the investing process, nonetheless to ensure we’re making the right investment decisions, expert tips from the professional can come in handy. Tony French, the in-house Diamond Consultant, at Diamonds Factory shares his professional expertise on the 5 most important things to look for when investing in diamonds.

1: Value determined by cut, weight and colour

In order to grow the value of your purchase, it’s important to address the shape, colour, and weight of your diamond. Trends in investing change over time, with the most sought after shape being the round cut. Although the cut is ostensibly superficial, it affects the overall sparkle and therefore, the value of your diamond. The same rules can be applied for the intensity of some colours, such as Blue, Red, Pink, and Green.

In addition, acknowledge how the weight of your diamond can affect the value, for example the heavier (bigger) stones will often increase in price by a bigger percentage. Collectively, these factors also contribute to the supply and demand aspect which keeps prices continually high, and will ensure your item is re-sellable.

2: Provenance

Owning jewellery that comes from an influential public figure will bring significant value, but here’s the important part, it’s an absolute must to have proof of previous ownership. Possessing a piece that has significant history, or that was owned by a celebrity or person of interest, will both increase your item’s overall value, and create hype within a field of interest such as fans of that person.

It’s possible to proactively bring provenance to any unique diamonds that you own by loaning unusual, or bespoke pieces for film, theatre, or TV performances – then it can be advertised as worn by/in….

3: Find the source

Establishing the source of the diamond is one of the most important aspects of diamond investment. If you’re an inexperienced investor, try to buy diamonds that have NOT been owned by a range of people, as everyone in the chain will have taken a cut and the value will reflect multiple ownership. It’s always recommended to buy from recognised suppliers like ourselves or other manufacturers who buy directly from the people who have had them certified.

This will enable greater transparency, which is crucial when purchasing such a valuable item. You may also witness a sudden increase in value in your diamonds, as establishing a source will enable traceability and consequently, market perspective.

4: Certification

Linked closely with my last point, is the need to ensure that your diamonds are accredited by a reputable lab, and you have the certificates to prove so (a written document with specific grading details about your diamonds).

I must remind buyers that not all labs are the same, and some labs are better than others. For example, both the GIA (Gemological Institute of America) and the AGS (American Gem Society) are world renowned and therefore have a stellar reputation. I’d recommend doing some research when you’ve found the items that you want to buy and then make the call based upon your findings. Ultimately, proving certification will make your stones easier to insure and, on a personal note, it’s really nice knowing you have got what you have paid for – trust me!

Don’t forget to keep this paperwork in a safe location as well – you’d be surprised how easy it is to lose, or forget where you’ve placed it.

5:  Patience is key

You’ve now purchased your dream investment, but you notice that the market is thriving. Although it may be tempting to look for an immediate sale, I would recommend keeping your diamonds for some time, before even thinking about selling them. Generally speaking in the diamond investment world, an item is more likely to increase in value over a few years than a few days, so try and be patient!

Also, consider having your diamonds valued professionally on a regular basis. Making a judgement on how much your pieces are worth can be difficult if you don’t have the knowledge. Therefore, seeing an expert or an accredited consultant can provide both a valuation, and a fresh perspective in the wider market. Once you’ve got all that information, knowing whether to keep, sell, or even buy more pieces, will be a lot easier.

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.