The idea of investing in certified loose diamonds is attractive, especially in the current environment where mainstream investments appear risky. While investing in diamonds is feasible, it is more complicated than other forms of investment. When it comes to certified loose diamonds most people are well advised to invest in the enjoyment of owning and gifting diamonds, rather than investing for profit. It is true that certified loose diamonds have tended to appreciate in value over time, and therefore can be resold at a future date often for considerable sums of money. In this way diamonds are much better “investments” than many other high priced items such automobiles which rapidly depreciate over time. However, those round brilliant diamonds with excellent cuts tend to retain their original value over odd cuts such as Emerald Cuts, or Radiant Cuts.
Certified Loose Diamonds 101
There certainly are many astute individuals who have been, and continue to be, successful investing in certified loose diamonds. But for the average investor, investing in loose diamonds is problematic for reasons of limited liquidity and access to the resale market. Since each diamond has a unique combination of multiple quality factors there is no universally agreed upon value for a particular diamond, and therefore no formal exchange institution where diamonds can easily be bought and sold for current market price.
Clearly, jewelry businesses are investing in certified loose diamonds all the time and making profit on sales. But they are plugged into the resale market in a way that individual investors are not. In order for an individual to be successful investing in certified loose diamonds he or she must develop expertise in the diamond market as well as trusted contacts within the industry. He or she must follow market trends, buy the right size and quality diamonds very close to wholesale, and be willing to hold the diamonds until the market rises and/or a profitable sales opportunity presents itself. It is possible for an investor to partner with a retailer or multiple retailers. The jeweler provides access to the resale market and handles the sale. In this scenario, it may not be necessary for the investor to hold the diamonds long-term as a split of the margin between current wholesale and retail can often provide adequate return for both investor and retailer in the near-term. This arrangement is workable because even the most well stocked jewelers cannot have everything on hand, and may therefore benefit from an additional ready source of supply of loose diamonds.
Loose Diamond Investment Tips
Prices for certain diamond shapes, sizes and qualities have risen very rapidly in recent years. For those interested in investing in loose diamonds for financial gain there is definite potential provided they are willing to invest time and effort as well as money. But investors without this level of commitment should probably seek mainstream investment vehicles.
Be particularly wary of anyone soliciting investment in diamonds. Many investors have been stung by slick con artists who make big claims. Often the diamonds come with fancy documentation and may be sealed in official looking containers. This is not at all what the process investing in diamonds will look if done legitimately.
About WhiteFlash
Whiteflash.com, Inc is a specialist on-line diamond boutique with a history of offering the discerning on-line buyer diamonds that exceed the world’s highest standards for craftsmanship and performance.
Whiteflash.com is also the Internet’s premium designer and provider of custom diamond jewelry creations and offers an exquisite designer collection of diamond engagement rings and platinum and gold settings.
