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The best place to start is at the beginning; Before retiring, after "50" years plus in the industry, I always disapproved of the method in which the Media on several occasions made statements that were not true,"Diamonds are not an investment, they have no intrinsic value." I would like to dispel this myth by explaining how this statement came about, once explained I will demonstrate to you how you buy a Diamond that becomes more than an investment.
What the media always demonstrated, either on the TV or in varied publications was never a fair/honest assessment of a product. It was always on a finished piece of jewellery, invariably a ring; the cost of the example unfortunately was always from $100 to $500. Their claim was, when you wanted to cash in on your say $500 "investment" the Jeweller would only offer you a couple of hundred dollars. The industry could not argue because in cold hard Dollar facts, the statement was true.
What they never explained to the public was that the size of the Diamond in a ring or piece of jewellery at this low price level obviously has to be relatively small. Reason being the bulk of the money/investment has is in the gold and fashioning of the piece. For example if the mount/ring in 18ct (750) costs you say $300, then what can one expect in a diamond for $200, it would most certainly not be a carat stone. So naturally when you go to the Jeweller to sell the piece, the jeweler is only interested in the diamond as small as it might be he has no great interest in the secondhand gold because it only goes into his Lemil box (old gold) and when he collects sufficient he is able to send it to the refiners and receives a minimal amount of dollars in exchange.
To overcome this problem, one should invest in at least a half carat (0.50ct) stone, this way the main part of your investment is in the Diamond. Example, half carat (0.50) "E" color VVS1 purity would cost in the vicinity $5,200 - a more realistic balance to compare than the $200 example.
Suggestions on how to improve your investment when buying a Diamond. We will take it that everyone understands the "4 C's" Cut, Clarity, Color & Carat weight.
1. I strongly suggest you buy Quality and not size, (or wait until you can afford it) because firstly you will received more compliments on how beautiful your Diamond looks. More importantly if you ever decide to sell, it will command top resale price. The following information/suggestions are of my opinion, this explains what and how I buy for my family. We have never lost or been disappointed over all these years.
2. Carat Weight, we all know 100 points equal one carat (1.00ct), now to explain one of the most important factors in not only saving money, but achieving the best value for your money. Always buy as close to 1.00ct, not for instance 1.15ct a 1.50ct, not 1.60ct a 2.00ct not 2.18ct a 2.50ct not a 2.64 etc these are only examples, I am suggesting not buying odd sizes if you do you will be loosing 1,000's of dollars because when you want to resell you will find people buy one carat, one and a half carat, two carat etc. I will show you some examples later in actual Dollars on just how detrimental this is to your investment.
3. Color, Is very important, it is not necessary to buy "D" color but definitely "E" or "F" (if it has slight Fluorescence this is OK) but if you go below "E,F" to G, H, I, of which most try to sell to you, because of price. Unfortunately even the best proportionate cutting will not make the stone as attractive. Also you will find that the new buyer will say to you "I would give you more only if the color was better".
4. Clarity, Again it does not have to be "IF" "internally Flawless" but strongly suggest "VVS1" or "VVS2" (Very, Very, Slight) below "VS 1 & 2 or S1 are certainly less expensive but once again when you want to resell the buyer is going to say "well!! I would pay you more if the mark was not near here.)
5. Cutting, This is sooo important, this can either make or break the appearance of your Diamond. If you don't understand cutting, I admit it is a difficult one to overcome because people selling Diamonds, will tell you it is an "Excellent Cut", "Ideal Cut" "Perfect Cut Plus all the other names they create that sound irresistible. If I were a novice I would look for a "Hearts & Arrows" certified stone the only reason for suggesting this is it would give you some form of comfort knowing that the stone has perfect Symmetry. Two more, check the Girdle that it is not thick and has been faceted to cover it up. Make sure it does not have an open Culet.
6. Certificate, This is a must, for Insurance and most importantly for the day you want to resell I can assure you that the buyer will downgrade every aspect of the stone enabling a better purchase price. With the certificate there is no argument and further more your diamond has the same dollar value in no matter what country you are in. Meaning if your Diamond was for instance a Brilliant cut "E" color "VVS1" It has the same base price in every country in the world. Don't accept any old certificates as some will offer their own company Cert.Unfortunately many of these are not quite correct - and legally they get away with it by saying "In my professional opinion the stone is......." Therefore you should be looking at perhaps GIA (Gemological Institute of America). EGL (European Gemological Laboratory) IGL (International Gemological Institute) or perhaps AGS American Gem Society. Another HRD (Hoge Raad Voor Diamant) this one I prefer reason being it is sealed; they have a Laser service you can have an inscription on the Girdle. Best of all it comes with Micro film of the certificate of which you can always carry with you in case you need.
As promised above, examples how you can loose money quicker than you can make it. The stone dollar values I use in the following are only approximate prices but close enough to indicate what you could loose without this knowledge. Let us say we are buying a; 1.00ct. "E" VVS1 cost approx $14,500 pc (per carat) you pay $14,500. But if you were sold instead a 1.18ct it would cost you $17,110 a difference of $2610. When you go to sell the stone, buyers will offer you a one carat price. Hurts the old pocket doesn't it!! A little lesser quality, 1.00ct "F" VVS2 costing approx $12,000pc you pay $12,000, but if it was a 1.20ct the cost would be $14,400 difference $2400. Buyers will only offer one carat prices. Let us try a 1.50ct "E" VVS1 costing approx $20,200pc you pay $30,300, but what if you were sold for instance a 1.63ct it would cost you $32,926 a small difference of $2,626. When you sell they will still only offer you the price of a one and a half carat.Perhaps a 2.00ct "E" VVS1 costing approx $27,500 pc you would pay $55,000, supposing they sell you a 2.14 ct instead, you pay $58,850. A difference of $3850. 2.50ct "E" VVS1 cost approx $37,600pc you pay $94,000, but perhaps they only had a 2.61ct then your cost would be $98,136 difference of $4,136.
I hope I have explained in a manner of which you can understand. It does not matter what the size or quality it is all relative when you go away from those magic numbers.
May I take two more minutes of your valuable time by telling you a true story that might make you consider investing your spare "Pennies" into Diamonds?
I had a very good client many years back he was a Frenchman that fought in the French underground during the war, he always said "D" you should always wear something for little trouble and something for big trouble. Eventually for more peace than anything I had a heavy yellow gold chain made (small problems) and I made up into a "Pinky" ring a 2.00 ct stone (for whatever the big problem might happen). I collected historic cars and loved to restore them back to "better" than original. There was a car in England that I really wanted. So every time I went to the UK I went to see the car, I had a verbal agreement with the owner that if it was ever for sale I would pay the same price as he was offered. Years past, then one day I arrive and the owner said "how about that I just sold the car" and the buyer is supposed to be coming today at 3 o'clock with the money. Embarrassed, but he offered to ring the other person and explain the situation if I bought the money by 3 pm. Impossible to get the funds over to England in five hours - then all of a sudden it hit me - I could not get into "Hatton Garden" quick enough - sold my 2.00 ct ring and bought me a masterpiece. As I mentioned above Diamonds have the same pricing structure in every country, all over the world - and are not so heavy/cumbersome to carry around.
Hope the above assists in someway if & when you are making your next Diamond purchase. Cheers for now, Darryl.
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