For thousands of years diamonds have been a form of decoration, currency and
investment medium. Diamonds have risen in price over the years fairly consistently with inflation. At some points investment in the right stone would have
returned a much better percentage than similar amounts of stocks, bonds or
gold. On the other hand, an investment in the wrong thing or an investment
made blindly because of lack of knowledge, can and in many cases has caused
the buyer to actually lose money.
Remember, diamonds are normally sold on a retail basis. This is where you, the
consumer, buy most stones. As one purchases stones of a higher quality and
larger weight, stones that are designed for investment purposes rather than
ornamentation, it is possible to actually buy at or near wholesale prices.
When one goes to sell the stone, if one simply walks into a jeweler or New
York-type diamond seller, one expects to lose from the retail price the stone
may have been purchased at.
A number of factors establish the value of a diamond, one of which is the size
of the stone. There are certain levels where the value of a high grade stone
jumps appreciably simply because the stone is over this weight. In general, a
large high-rated stone is worth logarithmically more than a number of small
stones equaling the larger stone’s weight. It is, as one would expect,
considerably harder to find flawless or near flawless large stones.
When the jeweler or professional goes to buy a stone there are several things
he will evaluate in order. Generally the stone is graded using the four C’s of
diamond grading. These are:
1. Clarity
2. Color
3. Cut
4. Carat weight
There are established methods and models for grading stones and one could
reasonably expect to take a stone of a certain grade from one professional to
another and come out with a similar rating. One should also remember this
grading is subjective and there will be times when two accredited gemologists
will give a different rating, possibly affecting the stone’s value, by hundreds
or thousands of dollars to the very same stone. It is wise to be able to at
least make a good amateur estimate of the various rating points on your own
instead of having to blindly depend on someone you may not know.
