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.

There’s also a device known as a color meter which electronically measures the
color or lack of color in a stone. This meter is quite accurate although
fairly hard to come by unless one is a member of the Gemological Institute of
America.
The GIA color rating system has been established using alphabetical
nomenclature. The stones are rated from pure (totally colorless) down through
a sliding scale to yellow, which is the least valuable stone. The GIA color
rating system starts with the letter D and progresses through the alphabet as
shown below to Z, which would be very yellow.

A B C D E F ) Colorless
G H I J ) Near Colorless
K L ) Faint
M ) Yellow-White
N O ) Very Light Yellow
P ) Light Yellow
Q ) Yellow
R S T U ) Light
V ) Yellow to Fancy
W ) Fancy
X Y Z ) Yellow

After the letter Z, indicators are used to suggest the stone is more valuable
because of its hue; i.e., a “fancy” color. As you can see from the above chart,
D, E and F stones are considered completely colorless. G, H, I and J are near
colorless stones and take a lot of practice for the amateur to see any color
at all, while after J the stones begin to pick up a small tint of yellow that
is noticeable to practiced gemologists.
To correctly grade a gemstone, the stone must be loose, not in a setting,
should be on a perfectly white background, should have a white gem quality
temperature light and should be viewed from the rear of the stone. In other
words, the stone should be upside down Iying on its table. It is also
extremely helpful to have stones of known color grades nearby for active
comparison.
Never attempt to judge the color of a diamond when it is set in any kind of
setting, be it earring, ring, or whatever as it is strictly impossible to
judge the color of a mounted stone that is taking on hues and tints from the
mounting itself.
Color is a very important consideration in choosing investment quality
diamonds and, in fact, the differences in large sizes such as one carat and
over from a D to an E color (again these are the top rated stones and are both
considered colorless to the naked eye) can be double the price between these
two grades.