5 Things You Should Know Before Investing In Diamonds

Buying diamonds can be a good way to invest your money, but there are several things you should be aware of before entering the jewelry and precious gems market, particularly when buying diamonds. You may have heard of the three ‘C’s, well we've come up with five:

Color

Diamonds vary greatly in color and there are hundreds of different hues that you can choose from. This often makes individual stones more valuable, as a buyer may be looking for a specific color. You can choose from yellow, blue, pink, and black among others!

Cut

This is not the same as the diamond’s shape, so we’re not talking pear, square or oval here. The cut of the diamond is a measure of the stone’s reflective qualities. If you are planning to invest in diamond jewelry, an ‘ideal cut’ diamond can make a great buy. The ideal cut means that light can enter the stone, reflect from both sides inside the diamond, and then back out. This reflection of light is what causes diamonds to flash and sparkle, and a poorer cut can make a stone look dull.

Clarity

This refers to the amount of flaws or ‘inclusions’ that are present within a diamond. Because diamonds are formed naturally under intense heat and pressure, the vast majority of diamonds have flaws. Artificially made diamonds are as close as you can get to a flawless stone: a natural stone with very few inclusions can fetch a high price, due to its rarity.

Carat Weight

A carat is a unit of weight used to measure diamonds, but is not to be confused with karats, which is the method for determining the purity of gold. One carat is equal to around 200 milligrams (0.2 grams), and obviously, the larger the stone, the pricier it will be. The famous Taylor-Burton diamond worn by actress Elizabeth Taylor weighed an incredible 241 carats (48 grams!) when it was discovered, and was bought for a record $1, 050, 000 in the 1960s by Cartier. The current owner has had the diamond cut to a more modest 68 carats (13.6g). Princess Margaret famously commented on Taylor’s ring at a formal dinner, calling it “very vulgar”; Taylor invited the Princess to try the well known diamond on and quipped, “Not so vulgar now, is it?”

Certificates

Any diamond should be certified to validate its quality and value. The certification process should be completed by a reputable governing body within the gem industry, such as the GIA – the Gemological Institute of America. A certificate is essential for insurance purposes, and to ensure that you pay and receive a fair price when you are buying and selling your diamond. Jewelers are often known to under-pay, so certification can help you to wrangle a good deal!

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Monday, November 12, 2012