Diamond jewellery is a special gift that symbolizes love and commitment, but there’s much more to buying diamonds than simply making an expensive statement. When chosen wisely, they can make a great investment too.
Savvy investors are moving away from assets like art, wine and cars and diversifying their portfolios with sparkling diamonds. But if you want to really make money from these precious gems, it’s important to do your homework first.
Asking the question “does a diamond ring make a good investment?” brings up a myriad of answers on Google and other search engines. Some say yes, diamonds are among the best commodities to invest in, whereas others are less enthusiastic.
With any kind of investment, the secret to success is to learn as much about your subject as you possibly can, so spend some time reading up on what types of diamond rings are delivering great returns now (and likely to continue to do so in the future). But if you’re just dipping your toe in the water or looking for a quick, easy to digest guide on investing in diamonds, we’ve put together these handy tips to help you on your way.
1) Look To The Future
Diamond prices are all about supply and demand, so with concerns that the world’s natural supplies of diamonds are starting to run out now is a good time to buy. Demand is going to increase over the years, so if you’re looking to play the long game a diamond ring could be an excellent long term asset.
In both the short and long term, it’s important to consider what metal the stone is set in. Gold (both white and yellow) and platinum both tend to hold their value, so look for rings crafted from these for the best return on your investment.
When investing in diamond rings it’s important to think about how likely they are to hold their value, and how easy they will be to sell when the time is right. One thing that never changes in auction houses is that the more rare something is, the more likely it is to sell for a good price.
In 2017 the diamond market hit a record high with the sale of the incredible Pink Star, which was auctioned at Sotheby’s for a whopping £55 million ($71m). The 59.60 carat diamond has been hailed as one of the most amazing natural treasures of all time, described as the biggest internally flawless, vivid pink diamond ever found. But if you don’t have multiple millions to spend on a diamond ring, you can still make a small fortune if you invest wisely.
You can’t expect to make a fortune from a mass produced diamond ring that looks the same as thousands of others, so if you’re thinking about a long term investment it’s worth considering a naturally coloured diamond, or a high-quality white one. Both are very rare, with pure white, pink, green and yellow diamonds all doing very well in auctions. The most rare of all are blue and red diamonds, so if you’re fortunate enough to find one of those in your care make sure you look after it, as you may be sitting on a goldmine. We know that blue diamonds are created when a chemical element called boron is found naturally in the stone, but even experts don’t really understand how red diamonds occur – making them even more mysterious and desirable.
The price of coloured diamonds continues to grow, with the value of blue stones soaring by 228% between 2007 and 2017. This means that rare diamonds are consistently outperforming the stock markets, but there are still horror stories about investors being caught off guard and losing all their money. Which leads us to our next point…
2) Only Buy From Reputable Sellers
As with any expensive commodity, the diamond market is rife with con men and thieves who are out to take advantage of inexperienced investors. Even seasoned diamond connoisseurs have been hypnotised by sparkling gems that aren’t what they seem, so do your research and seek expert advice. It’s absolutely essential that you look into a company before buying from them, read reviews and ensure their diamonds come with a certificate of authenticity and grade. And remember, if it seems too good to be true, it probably is.
3) Get To Know the Five C’s
The value of a diamond is based on five important factors – Carat, Cut, Colour, Clarity and Certificate – and the last one is really important. All wiley diamond investors understand the value of that little bit of paper, which must come from an accredited, international, independent body – not just written by the diamond seller. A proper diamond certificate details the carat, cut, colour and clarity of your diamond and is a crucial document when it comes to selling it on. Each stone should also have a laser inscription which relates to its certificate, and valuers will always look for this when you’re considering selling.
Any seasoned investor will tell you that it’s important to diversify your portfolio, so you have more opportunities to sell at a good return. If you’re serious about making money from diamonds you should consider buying different styles and designs for a broader appeal. Investing in an unusual looking diamond ring that isn’t necessarily to everyone’s taste is a good idea, because you can guarantee that someone out there will fall in love with its unique, offbeat charms – and be willing to pay for the privilege.
5) Consider Other Ways To Invest In the Market
You don’t have to buy a diamond ring to make money from diamonds. It’s becoming increasingly common for investors to buy shares in diamond mining companies and associated funds too. This is a good option for investors who like high risk ventures, but if you prefer to dabble it’s safer to buy a diamond ring and take good care of it.
6) Enjoy Them (but keep them safe)
One of the great things about investing in diamonds is that they don’t have to be locked away in a safe or hidden in a box in order to keep their value. Like vintage watches, they’re meant to be worn and enjoyed, so have fun showing them off – just make sure they’re insured against theft and damage.
Browse our online store today for our stunning collection of certified diamond rings, and feel free to ask our friendly team of experts if you have any questions.