IS IT A GOOD IDEA INVESTING IN DIAMOND JEWELLERY?
Diamond jewellery is beautiful and valuable pieces that last a lifetime; and just like every other physical product, they tend to increase in price over time... but are they are a good investment? Making your diamond jewellery an investment option isn’t such a bad idea as diamonds are known to offer good returns, and they have seen a price increase in recent years. However, like every other form of investment in the world, diamond jewellery has its pros and cons, and you need to put these into consideration. If you want to invest in diamond jewellery, you should consider if it’s worth investing in or not, and we’ll help you decide or make the most out of your investment in this article.
Things to Consider before Investing in Diamonds
Diamond jewellery can be a good investment option if you know what you’re getting into and understand everything you need to before investing to ensure you reap all its benefits. Here are a few things you need to consider and bear in mind investing in them:
1. Know the Basics:
The first thing you should know about diamond jewellery is the four Cs carat, color, clarity, and cut. Carat is the unit of weight or the measurement of the weight of a diamond. The color of the diamond (or the lack of color) is important as colorless or white diamonds have the most value. If a diamond has less imperfection, its clarity grade will be higher. The better a diamond cut, the more the diamond will sparkle, as the diamond’s cut controls its brilliance and fire.
2. Have a budget:
You’d want to have a budget in mind to know how much you‘d like to invest. This is to ensure that, although you require a high amount when investing in diamond jewellery, you wouldn’t want it to go over your budget and you end up at a loss in the end.
3. Buy “Only” Certified Diamonds:
It is very important to buy a certified diamond instead of trusting solely what the seller says or writes online, as the price of the diamond can become higher with every minor change in the diamond's attributes. It is highly recommended to buy only diamonds with GIA certificates for colored diamonds and IGI certificates for colorless diamonds, as they’re the most known gemological laboratory. Asides from that, when you intend to sell your diamond, the buyer might request your diamond’s GIA/IGI grading report.
Does Diamond Jewellery have Resale Value?
Every diamond jewellery, be it a ring, a necklace, or an earring has a resale value. However, the resale value depends on the demand and supply of those precious stones. In reality, it’s very unlikely to sell your diamond jewellery at the same price you bought it when it was new as, in every case, you’ll most likely sell your diamond at a loss. “Why?” You may ask, it depends on several factors ranging from the diamond’s retail price where it was purchased, to the difficultly in reselling pre-owned diamond jewellery, how you choose to sell, where you choose to sell, and how much the diamond is worth.
Do Diamonds Appreciate in Value?
There is a misconception that diamonds are a good investment that appreciates in value over time. But, this isn’t true for most diamonds as they, except exceptional colored diamonds, rarely appreciate in value; as prices of diamonds have witnessed a drop over the past years. However, the appreciation or depreciation of diamonds depends on several factors such as where and when you bought them.
Most people want to sell their unwanted diamond jewellery at the highest possible price, but in reality, just like every physical item, most diamonds depreciate in value over time; as the value of a diamond literally depreciates the minute you leave the jewellery store. When selling your diamond jewellery, you’ll most definitely be at a significant loss and, the best-case scenario is you’ll only be able to recover 20% to 60% of what you initially spent on the diamond when it was new.
Where Can I Sell My Diamond Ring for the Most Money?
Anyone looking to sell their pre-owned diamond hopes to sell it at a high price to avoid being at a significant loss. Finding a place to sell your diamond ring at a good price isn’t that difficult anymore. There are a few places you can easily sell your diamond ring without stress, and for good money:
Selling to someone via online stores like eBay or Craigslist is super easy, and it gives you the best price for your diamond ring as you’re selling directly to the person and can fix a price by yourself. However, this method requires you to source out reliable buyers to avoid risk as you’ll be dealing with strangers.
2. Retail Store:
You can make it easy for yourself by going straight to the vendor you bought your diamond ring from; as long as they do buyback or offer trade-in. The con here is that not every vendor offers these services and if they do, it’ll be at a fraction of the original price it was bought. However, if they don’t offer these services you can ask if they offer a consignment option, where they’ll sell your diamond ring on your behalf to another customer at a price you agree to, and take a percentage of commission once it’s sold. The con here is that your diamond ring could remain unsold for months if there’s no demand for it. So if you’re looking to sell quickly, this might not be a good option.
3. Try a Pawn Store:
You could also opt to sell your diamond ring to a pawn store or a “cash for gold” business where they’re likely to immediately buy your diamond ring for instant cash. The con here is that these stores usually bid their offering to the lowest price possible as a bargain for the instant cash they provide.
Risks of Investing in Diamond Jewellery
When planning to invest in diamond jewellery, asides from the pros, you also have to consider the risks involved to ensure you’re not a loss and you’re prepared for whatever comes up. Here are some risks to bear in mind:
1. Price Transparency:
Unlike gold and silver which have a price index that can be followed and checked, diamonds don’t have such. Although there is the Rapaport price list which is used by most diamond dealers, it’s not useful as it only takes into account the basics- carat, clarity, and color, and it only refers to white colorless diamonds. In reality, the price of diamond jewellery is mostly determined by supply and demand. It’s advisable to do lots of research, compare prices, and buy your diamond jewellery from a reputable and reliable source.
2. Lack of Tradability:
Buying a diamond is much easier than selling. Although there are some companies that buy diamonds, they pay less than your initial price. You can, however, try selling on online stores like eBay or Craigslist, or to retailers. Lastly, if you have high-end pieces like unique gems, you can try selling your diamond through auction houses.
In the end, nothing beats patience when you’re looking to invest in diamond jewellery. Diamonds are not like stocks that’ll spike to 30% the following year as such, you should consider diamond jewellery for long-term investment.