any comments if diamonds appreciate in value?

Date: 2/26/2006 4:34:16 PM
Author:scarleta
Since joining this forum I am learning a lot and I wonder if diamonds do appreciate in value?

Date: 2/26/2006 4:34:16 PM
Author:scarleta
Since joining this forum I am learnig a lot and I wonder if diamonds do apprecieate in value? Any comments would be great.. I am currently waiting to receive a prices of stones I mention on this board yesterday and I am wondering what your opinion is on that. Thanks again and I surely learned a lot from here in such a short time...

Date: 2/26/2006 10:25:16 PM
Author: Richard Sherwood
The wholesale value of diamonds steadily appreciates each year. The key is to purchase your diamond as close to wholesale as possible (either over the internet or through another competitive source). That way, in a few years the wholesale value will overtake what you paid (via appreciation) and continue to increase in value.

The second key is to be wise in how you resell your diamond, if you should ever decide to do so. This is best accomplished by selling to the same market diamond vendors do, the public. If you resell for wholesale or close to it, you'll be undercutting the vendors yet still be getting far more than if you resold your diamond back into the industry (who will only usually pay you half to two-thirds of wholesale for a cash purchase).

In this manner (depending on how long you wait to sell) you can usually recoup what you paid and often make a profit as well.

You can also recoup about the same amount of money if you allow a jeweler to sell the diamond for you on short-term consignment. Many are happy to get 'free' inventory at wholesale value from which they can make their normal profit. Some auction houses also do a good job of getting you close to wholesale value. You just have to let them know that you're aware of the value of your gem, and not willing to take less than a certain amount.

Diamonds will always hold their value on a trade-up basis as well, either with the company you purchase from or another company that is confident in their buying and selling.

When buying, make sure you purchase a 'no apology' diamond. A 'no apology' diamond is a stone which has good color to the eye, is eyeclean, and has a fine make or better. Don't buy any diamonds with a 'problem', as this dramatically reduces the number of people who might be buyers down the road. Buy a diamond that appeals to as wide a market as possible.

Additionally, don't purchase too high a quality a stone, as the market for rarified qualities (I'm speaking of DE/IF-VVS qualities) is dramatically less as well. I say this just in regards to 'popular' demand, connoisseurs will always be interested in these stones and keep this market healthy, but with not as rapid a turnover as more 'mainstream' quality stones.)

Keep also in mind that round stones command the largest share of the market, and are the easiest to resell.

When I was in the estate business, I resold many individual's diamonds for them. If they purchased smart and enough time had passed for appreciation, I was usually able to get them their money back and often make them a profit.

A typical example is a grandmother who came in with a 3 carat stone that she had bought for $6000 twenty years earlier. She wanted to help her grandson with his college expenses. I resold the diamond for $19,000, kept $2,000 for my profit and gave her $17,000. She was thrilled.