How To Buy Diamonds For Investment
Diamonds were and will remain to be one of the favorites when it comes to investments. People, over the last few years have been investing in diamonds, but the catch here is to plan before you invest. Any investment can be fruitful, when done after careful market analysis. Below are some of the points which one should consider before investing into diamonds.
1. Buy a piece you like
Don’t just buy any piece, but get the one piece which you like the most. Diamonds do not appreciate in short-term and one needs to wait for a reasonable time of 5- 10 years before capitalizing or reselling the stone. Hence, go for a good stone which you may like to wear before reselling it in future as they do not wear off with time. Diamonds are forever and hence, they can be used and their value will not get depreciated.
2. Choose a carat, colour and clarity that is in demand
When the sole purpose of buying a diamond is to resell it in future, then study the market trend properly and invest in a piece that is in demand. However, this does not mean that you have to make an extensive research and find a rare piece, but a piece that has high color and clarity would be an intelligent investment. Big sized diamonds have always remained in fashion, but their supply is not as per the demand and this is the reason why investing in big pieces would assure you greater returns. 2 carats or more is a good size in which investment can be fruitful. But, buying a rare diamond that has both clarity and color will not be in the capacity of a normal investor and hence, those who cannot invest a huge amount should try and invest in those pieces whose demand is higher in the market so that’ll be easier for them to resale it in future.
3. Do your market research
Already mentioned above that thorough research is what required while investing your money. Take considerate amount of time and study the market economics before making any investment. Never put your money blindly into anything that may not work in your favor. Search as per your budget and invest in the best available option. Auction is a good option as it avoids the margin that is included while trading in a retail market.
4. Certification / authenticity
First State Auctions Director Ari Taibel who happens to be in the jewellery industry for more than 20 years, suggests that if his advice is to be taken, then he will advise people to consider the well regarded laboratory report from a recognized laboratory, which states the quality of the diamond. This report will always act as an instrument of proof and this will also help while one wants to resale their diamond. If you plan to your diamond in Australia, both GIA and GSL are reputed grading institutions that are known for their best grading standards. For selling purposes outside Australia, GIA is shall be your best bet because it is an internationally recognized institution. A certificate will give your potential buyer the confidence that he is getting a value for his money and appropriate amount has been charged from him.
5. Consider your outlets for reselling
Research and look for various markets if you want to make more and more money with our diamonds. Build a network of some good clients both online and offline and you may try and sale your diamonds in different markets wherein the demand is higher. For example, some investors take their diamonds and sale them in Chinese markets as they get higher value because there is a price differential in China and simultaneously the demand is also higher making it a good market for diamond trade.
6. Calculate the costs involved in buying and selling
If you do not have an established network of your own, then you may have to trade through middlemen which will involve commission costs as they will be selling the diamonds on your behalf. Therefore, it is advised to identify all these costs before making any purchase as these costs will help you identify the feasibility of one’s investment.
7. Avoid treated and synthetic diamonds
It is advised that you should not invest in color- treated, fracture-filled or laser drilled s their value gets decreased and it’ll be difficult to resell them. They are not only lesser in value, but their appeal will also be lesser towards the potential buyers. This is the reason that First State Auctions trade into only those gemstones that are obtained naturally. For this matter a certificate from the recognized laboratories like GIA and GSL is required as they identify if the stones have gone through any artificial treatment before we put our cash into it. This is a safest way to invest your money into something and has an added benefit as it eliminates any chances of infringement.