Are Diamonds a Good Investment? Buying a piece of diamond jewelry or a diamond, in general, is intimidating especially if you are buying it for investment purposes like gold jewelry. Diamond is more expensive than gold and you may be unsure if it will earn you any profit when you will sell them.
If you are here for a short answer then let us give you a straight one, high-quality diamonds are a good investment if you are playing a long-term game, but if you are looking for short-term gain then the diamond will not reward you as much.
Now for you proof-seeking peeps, we have researched a lot and have gone through the price history of diamonds. In this blog, we will tell you why a diamond is a good investment.
6 Reasons why diamond is a good investment
Diamond is indeed one of the most beautiful stones on Earth, but considering its high price it may surely seem like a risky investment. So, in order to know why are diamonds a good investment
Here are 6 reasons why investing in diamonds is a good choice.
1. Size
If we talk about the size to price ratio, then a diamond tops the list. Even a small diamond stone is worth more than any other thing of this size on Earth. The size of the diamond makes it easy to move and sell. It is easy to hide a million worth of diamonds but it will be hard to hide a million worth of gold or any other metal.
2. Durability
Considering its size and glass-like properties people usually ask ‘How strong a diamond can be?’. Let us tell you a fun fact, diamond is known to be the hardest known material in the world. Do not judge a diamond with its size it is very strong and will not crack even if you drop it.
Diamond will not crack or wear off, so you don’t have to worry about it decreasing in value in case you dropped it, just don’t lose it.
3. Storability
Considering the small size and durability of a diamond, it is very easy to store it. It will take far less space than gold or silver, and is worth far more than them. All you want is a small and strong safe and you can store diamonds worth millions of dollars in it.
4. Usable investment
You can drop your diamond and it will not crack or wear off, so why not wear it. You use your diamond in a diamond earring or a diamond stud, it will not depreciate in value. It is one of those investments which you can use while you have it.
5. They maintain their value over time
The main reason to invest in diamonds is because of their price history. According to stats, the show price of diamonds has approximately increased by 32-33%, giving an average of 4% each year in the past 10 years.
6. Inflation proof
Diamonds usually appreciate in compliance with inflation, making it the best investment tool.
These were the reasons why diamond is a good investment.
How to Invest in Diamonds?
So now that you know that diamonds are good investment tools, but without knowing how to invest in diamonds you will be taking risk of loss. To save you from loss here we have a guide on how to invest in a diamond.
Choose a good-quality diamond
Before choosing any diamond keep in mind the 4cs of diamonds. Color, carat, clarity, and cut.
When it comes to color, the color grading scale runs from D to Z. With D having the least amount of color and Z with the deepest hues. With that said less the color more will be the price and better it is for investment.
Do not go for colored diamonds as they may be good for jewelry but not good for investing purposes.
Carat
Carat or weight is an obvious factor that will influence the quality of a diamond. More the weight bigger will be the diamond. Choose the carat according to your budget.
The clarity scale shows the number and appearance of spots and blemishes in a diamond. If no inclusion is seen on 10x magnification, then the diamond is considered flawless. Always choose flawless diamonds when it comes to investing.
Cut
The cut of the diamond also affects the value of a diamond. A clean professional-cut diamond will have more resale value than a poorly cut diamond. So, choose diamonds with a clean-cut for investing.
Make it a secondary investment
If you are including diamonds in your investment portfolio then make sure they are not your primary investment area. Do not keep all your eggs in one basket, diversify your portfolio so that even if you suffer a loss in diamonds, you can cover that up in some other investment.
Buy your diamonds cheap
It is the basic rule of investment, you should buy your diamond when the market is low so that you can buy them at a low price and then hold them for the long term. This will earn you maximum profit.
Play long term
If you want your diamonds to give instant profits, then my friend you will be sad to know that diamonds are not a good option for the short term. They may seem classy and high class but they are not your get-rich-quick plans. If you are willing to invest in diamonds they always aim for the long term. Their value will surely increase in long term, but in short term, they may even reward you with loss.
Get your diamond certificate
When buying a diamond always ask your jeweler or trader for a certificate. That is the certificate of authentication, which contains the clarity, color, and guarantee of authenticity for your diamond. Never settle for diamonds with no certificate included as some buyers want to see your diamond certificate before they will buy diamonds from you.
This was the guide that you should follow before buying a diamond.
Parting words
In the end, we can be sure that diamonds are a good investment in the long term but different than crystals. In addition to being beautiful as a jewel, they are good even as an investment. It is a no-brainer to invest in a diamond.
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