Diamonds as an Investment - Buying and Selling Diamonds for Profit

1. Do buyers trust you? How do they know it is real? A jewelers name and reputation, like Tiffany, command a premium because of trust. You may loose that premium when you sell.
2. Unless you are famous, you offer a buyer little or no prestige, and no flexibility, or service (e.g. ring sizing, appraisal etc.)
3. Buyers usually only want the stone(s). They give you nothing for your setting.

1. Not everyone trusts banks. In some cultures and countries often +10% of wealth is "portable". Cashing in gold and diamonds helped many Chinese escape from Indonesia in 1997.
2. Some women consider their jewels as security or "running away assets" (few diamonds are returned if the relationship ends).
3. Jewels are emotional or family investments; a band of diamonds marks a child's birth, a ruby bangle for a 40th wedding anniversary etc. They are usually an important part of an inheritance. The more love in the family, the higher the non monetary value.
4. A $100,000 diamond ring has more 'investment' potential than a $1,000 ring. You do not buy a $1,000 painting hoping to sell it in a few years for $5,000. There is relatively less cost to selling an expensive piece; as the value goes up, seller's margins come down, just like in real estate.
5. Less people are diamond investors. It is easier for a buyer to compare the prices of many similar cars, properties or shares. Jewelry requires a lot of specialized expertise.

1. Consider buying something that can be worn most of the time (not left at home for thieves) and you may not need to pay to insure it.
2. A single diamond does not go up in value faster than say a pair or a matched set in a 3 stone ring.
3. But a single stone may be more liquid than a collection. A single stone might cost less to set.
4. “Investment diamonds must be D Flawless or VVS quality”. What rubbish! Rarer diamonds are the hardest for you to sell. Medium quality diamonds (with no visible imperfections or obvious discoloration) are more saleable, and go up in value at a proportional rate to rarer more expensive diamonds.
5. Princess cuts are hot at the moment, but in a few years they will be passé. Heart shapes, marquise and other shapes come and go in fashion. Round brilliant cut diamonds are definitely the best most resell-able in the long-term.
6. 90% of round diamonds are poorly cut. A clever buyer will buy a non-traditional ‘Ideal Cut' diamond that will fit into the new GIA and AGS best cut standards.
7. Fancy colored pink diamonds may become rare if the Australian Argyle mine output falls as appears likely. But pinks are hard to re-sell.