As world markets tumble and economies continue to flag, some investors are turning to tangible goods as a proven method of securing their wealth. This means they are purchasing real estate, art, precious metals and precious stones, such as diamonds, in larger numbers than ever before.
Do you have to be a billionaire investor to purchase stones with enduring value? Absolutely not!
Almost any budget can afford a good diamond that will only increase in value as the years pass. The key to purchasing a diamond with investment value is to be aware of a few important factors around what brings especially higher values to a diamond.
While many people are aware of the famous “Four Cs” of diamond shopping, such guidelines only tell the consumer how to assess a diamond on an individual basis, and not for maintaining or increasing in its value over the years. In order to understand whether or not a diamond will hold its worth, or become even more valuable, the shopper should consider the following:
Size
Trendiness
Wearability
Marketplace
Most diamond experts agree that the bigger the stone, the better the investment.
Unfortunately, the quality of the stone comes into consideration as well, and a two carat diamond of poor quality will not increase in value as time passes, and may even lose some value as the dollar rebounds. Fundamentally, this particular guideline demonstrates how the bigger investors yield such high returns on their diamond purchases. For example, in 2003 one investor purchased a ten carat, colorless diamond for approximately seven hundred thousand dollars.
That same stone has recently appraised at over two million dollars. This is an increase of over one hundred thousand dollars per carat purchased. Of course, such an investment is generally out of the question for most people, but the higher the carat count, and the better the stone, the more value to the investment over the “long run”.
Designer diamond jewelry is always popular, and each year sees a wide range of new styles or designs introduced to the market. Such pieces have immediate consumer value because of their trendiness, which gives them a higher price tag. Once their popularity begins to fade however, so too will their market value. It is important to consider such diamonds in regards to their value ten, twenty or even fifty years later to truly appreciate if they are an investment or just a lovely fashion statement.
For example, a diamond horseshoe necklace has been a popular piece of jewelry for several seasons now, and while there are many affordable versions available, for enduring value or investment purposes, only those crafted with high-quality diamonds will retain their value over a longer period of time.
Additionally, there is a growing interest in heirloom or collectible jewelry that also serves to fulfill the needs of diamond investors. For example, the “Art Deco” period saw a great deal of larger, nearly flawless, diamonds in pendants and rings. Today, many savvy shoppers and jewelry dealers visit heirloom jewelry specialists and vendors to find such investment-quality goods.
There are “classic” styles, cuts and materials in jewelry and the best of the heirloom pieces will employ these trends. In fact, many popular designers look back to earlier eras for their lines of diamond jewelry, and a good investor will do a bit of research around diamond cuts and colors as well as jewelry styles and materials when looking to purchase such pieces for investment.
Of course, no diamond jewelry is really worth its cost if it is not wearable or considered fashionable by its owner, so “wearability” is a key factor in a piece of diamond jewelry for investment. In addition to long-term value, the owner should derive long-term pleasure from owning the piece and this should be considered when reviewing items for purchase. A jewelry box full of glittering diamonds may be a good investment, but if they simply sit and gather dust because the owner does not find them appealing to wear, then part of the joy of owning such diamonds is missing.
When investing in diamond jewelry it is important to choose only those pieces that have personal as well as market value. For example, instead of purchasing an ornate pair of “dressy” diamond earrings, it may be a better idea to find some elegant diamond studs. The single stones may be of greater value over the long-term, especially if the best cut and clarity are selected. Additionally, diamond stud earrings are an incredibly versatile accessory that can be worn “everyday” or on special occasions.
Finally, when looking at diamond jewelry as an investment it is important to accept the vagaries of the marketplace. Only those who make informed purchases, and who are willing to live with the risks of the global economy will find such investments worthwhile. Anyone else will simply own a beautiful mixture of highly valuable property and elegant style.
