There are lots of reasons why different people choose to invest in diamonds. One of the primary reasons for investing in diamonds is that they maintain their value over time. If you buy and hold on to your diamonds for a while, it is certain that they will be worth more when you sell them.
Another vital point is that the demand for diamonds has been growing while supplies have decreased. Because more people are buying diamonds than ever before and the reserves of suppliers going down, it is expected that the value of diamonds will continue to rise.
Diamonds are also a good store of value. Furthermore, diamonds do not deteriorate or require costly maintenance to retain their values. As long as you store them in a safe place, diamonds will have their value even if you do not pay any attention to them.
So, how do you buy diamonds for investment, and how can you be sure of making a good return? In this article, we will discuss why you should invest in diamonds and other things you should know about them in 2022.
1. Diamonds Are ‘Crisis Resistant’ Investments
Diamonds are considered secure – crisis-resistant – investments. This is especially important in 2020. Whereas all the traditional components of an investment portfolio, such as bonds, shares, and futures contracts, crashed because of the coronavirus, diamonds were hardly affected.
Moreover, the macro-economic law of supply and demand indicates a structural increase in diamond prices on the world market. Even the much cheaper lab-created diamonds still hold a lot of value and will be a great investment or family heirloom.
Not only is lab-grown diamonds, 100% real, but it also is free from social issues such as unethical labor and excessive carbon footprints. Thus, if you are new to investing in diamonds, it is best to try this diamond type out, considering its price.
2. Observed Long Term Profitability of Diamonds
Increasing Demand: The swift increase in the number of middle-class people in BRIC Countries (Brazil, Russia, India, and China), who are eager to live the lifestyles of the elite and rich, has a direct effect on the price of diamonds in the world market.
Decreasing Supply: There have not been any significant diamond mine discoveries in the past few decades. Currently, operating costs will increase as mines are forced to descend to deeper layers.
3. Maximize Return on Investment During Resale
This exclusivity leads to a limited number of buyers, which means that it will require more time to resell these diamonds at a desirable price.
To maximize your return investment during resale, experts advise you to invest in diamonds with carat weights between 1 to 5 carats. With these diamonds, the combination of liquidity, stability, and profitability is ideal.
4. Security With Certified Diamonds
Certified Diamonds enable you to objectively identify, test, verify, and price diamonds for purchase and resale purposes.
Ensure to buy diamonds certified from the most renowned diamond institutes:
- GIA: Gemological Institute of America
- HRD: HRD Certificate Antwerp Diamond High Council
- IGI: International Gemological Institute
5. Selective Liquidity
In spite of the fact that there is no public trading platform, diamonds still remain highly liquid assets. This liquidity can greatly vary depending on two categories:
- Commercial Grade Diamonds: Colorless and unbiasedly graded high-quality diamonds between 1 and 3 carats with at least a G color and VS2 clarity.
- Very Rare Diamonds: Collector’s market with huge stones, intensely colored stones, or exceptionally well-cut stones with fancy shapes.
6. Exceptional Emotional Value
Diamonds are not only from a rational point of view, an exciting investment. The emotional value of diamonds cannot be overlooked and is, in a lot of cases, priceless. Investing in diamonds is the same thing as investing in exceptional natural beauty. Despite being a volatile market, investing in high-quality diamonds can hold considerable gemstone value over time.
Light in weight, they represent great value. Received as an inheritance or gift, diamonds exude a high emotional value.
Valuing Diamonds
Valuation is one of the biggest problems for lots of people interested in diamond investing. Many people know diamonds have value, but they do not know what makes one diamond more valuable than another. Our exclusive range of jewelers will help you find an ideal engagement ring.
The first step to understanding how diamonds are valued is learning about the 4 Cs: carat, color, clarity, and cut.
The Risk of Diamond Investing
Diamonds are a good form of investment, but this investment comes with some risks. One of the most significant problems of investing in diamonds is valuation and pricing. Jewelry manufacturers can invest in diamonds to ensure they have a steady supply of this valuable gemstone for their creations. When you buy gold, you can quickly look up prices and buy gold bullion with a standardized value. This is not so with diamonds.
To ensure you are buying at the right price, you should only buy diamonds from dealers with a good reputation. Also, you must ensure that the diamond is certified to verify its value. Several groups offer diamond certification, but the GIA and the AGS are two of the best.
Another problem is that diamonds are not as liquid as other investment options. Selling diamonds can be time-consuming and difficult, so they are not the best if you need to turn your investment into cash in a hurry.
How to Invest in Diamonds
Investing in diamonds means buying the physical stones to hold onto for a future sale. This means that you need to find a dealer and buy diamonds. However, you do not want to buy from the first dealer you find.
You should endeavor to compare prices between different dealers to find the best price before you buy. There are several reputable online dealers that you will be able to reach from the comfort of your home.
Conclusion
Diamonds make excellent investment sense. They have high intrinsic value, they are always in demand, and they last forever – plus, they are small, portable, and easy to store. Like most precious metals and gems, past performance shows that they will increase in value over time.
Investing in diamonds is a long-term business and you can make lots of money from it. But you need to be willing to dedicate time to learning about diamonds if you wish to succeed.
Also, you have to be very careful with the dealers you buy from, and you need to be patient when it comes to the time you have to sell. If you lack the necessary patience and commitment, then diamond investing might not be the right option for you.
