Buying a diamond for engagement/value hold

[2carathopeful]

Hey everyone! I'm not entirely sentimental about the diamond I need to buy and would prefer one that a good quality/better "investment" vs one I love and was wondering if the nice people of this forum would help me out? I'm looking round, ~2carats, ideal cut, H/G possible I if it presents a better value, I don't know her ring size but she has small hands, maybe 5 possibly smaller.

Would anyone be able to help find a few choices?

 

[lovedogs]

Hey everyone! I'm not entirely sentimental about the diamond I need to buy and would prefer one that a good quality/better "investment" vs one I love and was wondering if the nice people of this forum would help me out? I'm looking round, ~2carats, ideal cut, H/G possible I if it presents a better value, I don't know her ring size but she has small hands, maybe 5 possibly smaller.

Would anyone be able to help find a few choices?

Unfortunately, diamonds aren't an investment. They simply don't hold their value (I compare them to cars in that regard). Obviously we all love diamonds, and enjoy buying and wearing them, but one shouldn't buy them as an investment.

If you want something that would hold value in terms of an upgrade, high performance diamonds (HPD) offers an 80% lifetime buyback, which is better than anything someone could get reselling. Alternatively, whiteflash has an amazing upgrade policy that just requires spending more than the original amount.

If you are ok with the above (in terms of understanding that they aren't an investment), what are your preferred specs? Would you still want an ideal cut, 2 carats, H/G color? And what is your budget for the stone?

 

[sledge]

If you want something that would hold value in terms of an upgrade, high performance diamonds (HPD) offers an 80% lifetime buyback, which is better than anything someone could get reselling. Alternatively, whiteflash has an amazing upgrade policy that just requires spending more than the original amount

Ditto. Diamonds are horrible investments. Go put your money in a mutual fund if you want a safe investment that grows mildly aggressive.

There are some conditions. Not many, but you need to be aware since this is a major part of your buying decision.

https://www.hpdiamonds.com/en-us/whyus/whyus-lifetime

I don't think anyone does better.

 

[Bron357]

Diamonds aren’t investments and unless you can snag a mis described or overlooked diamond in a ring at a pawnbrokers or auction, what you pay today will still be worth less tomorrow.
And unless you are in the big and/or rare and desirable category, if and when you go to resell your diamond, yours is just one of many thousands similar.
The “biggest loss” is usually in the setting. It’s expensive to have a good jeweller designer create your dream engagement ring and while the $4,000 plus setting is what it costs you, 5 years down the track as a secondhand setting it’s basically gold weight and diamond value ie $1,500 or so, if someone likes it. Most people like “their design” not someone else’s.
That coupled with the fact that most people considered previously owned diamonds as second hand and they expect a 10/ 20% discount. Of course there’s no way of knowing if that Diamond bought from a diamond broker is “new and fresh to market” but that’s the perception.
When mr or ms ordinary citizen try and sell jewellery, even with reports and whathaveyou, it’s either consignment, auction or even eBay. All those avenues charge fees, between say 10% and 30%, so you’ll lose money there too.
So diamonds do retain most of their value but fancy designed settings don’t and selling a “pre loved” diamond isn’t easy or without additional costs.

 

[TreeScientist]

Agree with @sledge: Don't buy a diamond as an investment. If you want a sound investment, put the money in a market-tracking low cost index fund like VTSAX and thank me later.

Buy a diamond for the emotional connotations behind the purchase. As @lovedogs said, if you really wanted a diamond that you could flip later on, about the best you could do is buy a CBI from HPD. Getting 80% back on your purchase is about the best you can hope for.

But generally, if you wanted a diamond that is easy to sell by yourself on the open market, you should buy a diamond that has the highest demand on the market. To my knowledge, this would be the specs that are in highest demand on the world market:

Carat- .5, 1, 1.5, 2, etc.: The "magic" carat weights
Shape: Round Definitely in highest demand and seem to hold their value the best
Cut- GIA Triple Ex: GIA is still the most widely known lab in the world by far. AGS is great, but it's practically unheard of in Europe and Asia. Oh, and if you're only concerned with selling it on the open market, you don't really need to worry about the cut as long as it's "GIA triple Ex," because 99% of the diamond-buying population still thinks this is the highest echelon of cut possible, and are not aware that not all Ex cuts are created equal (of course, you should still care about cut for your own sake ).
Color- D-I: D-G in high demand in Europe and Asia, G-I in high demand in America
Clarity- VS or higher: Seems like most people still prefer VS stones, with VVS and IF being the preference in parts of Asia.
Fluorescence- None or Faint: This is sort of a grey area, but I would say it's definitely easier to sell a diamond without fluor than with fluor, as fluor still has a negative connotation among the general population. I know that, personally, I would be hesitant to buy a diamond with Med or Strong fluor from a private seller, as it would be difficult to determine whether the fluor has a negative effect on the stone's appearance without having a trusted dealer to properly vet it for me.

 

[TreeScientist]

I've used the car analogy before, but I'll repeat it here, as it's about the best comparison I can think of that most guys can relate to.

Diamonds are like cars, in that a few may someday significantly increase in value and can be thought of as an investment (Like the Hope diamond or a 1967 Shelby GT500) but the vast majority of them will never be something that will gain significant value during your lifetime. So you shouldn't buy either as an investment.

 

[srke]

If you want something that you can liquidate quickly in an emergency, then you should consider buying from a vendor with a lifetime buyback policy (even though you will still take a loss when you sell, it means you can cash out your stone if you need to)

If you want something you can sell at a profit in future, then unless you are looking at fancy coloured diamonds and really know what you're doing, you should look elsewhere.

If you want something that will take less of a loss on resale, then consider a second hand ring from a private seller where someone else has already taken the hit for you (obviously with all the risks associated with buying from a private seller, although there are steps you can both take to protect yourselves )


One thing i will say about the car analogy is that if you have a mass market ford, in 30 years you'll have a likely no longer functional car with zero value compared to new cars at that time. If you have a diamond ,provided you don't damage it, your diamond will still be `worth' a proportion of the price that 'new' diamonds in 20 years will sell for. (proportional in you that you won't be able to sell it close to the retail price but its not going to be worth nothing just because it's 20yrs old)


It always makes me think of the following comparison :

--"mommy mommy grandma left me her old used diamond."
"oh its an heirloom!! "

-"mommy mommy ,grandma left me her old half used box of tissues"
'"... "

 

[sledge]

@Bron357 makes valid points about selling diamonds in a used market. For the most part, they are emotional purchases and getting a used stone can carry a negative stigma for some people. Sort of like buying a house where a murder occurred. Mentally, people can and do associate bad vibes with used stones.

While it wasn't directly stated I would add that many times the used market is saturated and can carry a bad stigma is due to high divorce rates. Couple this with the fact people generally sell stones in time of need, rather emotionally or for financial resons (aka "fire sale"), and it can push market values even lower.

@TreeScientist makes a good point about buying a stone the majority consider mainstream. Years ago I owned a Jeep Wrangler. A bright yellow one. I lifted it, took it offroad and it fit my personality well. When time came to sell my buyer market was similar enthusiast that liked high impact colors. Mall moms and posers prefer stock, or near stock Jeeps and most don't want the attention of bright yellow.

I've read studies where white is basically the easiest color to sell because its neutral and appeals to a broader market. Black is harder to sell because of cleaning effort required to keep it looking great. Red takes a special buyer but not as much as blue does. And so on and so on.

In regards to @srke's comment and all references to cars, we have to remember that diamonds are a pretty luxury and for symbolic purposes of love. Unlike cars, they are not tools that serve a function and consequently wear out over time; therefore, a used diamond that can span multiple life spans can and will depreciate differently than a car which is heavily affected by it's useful remaining life.

 

[2carathopeful]

Ah understood its not an investment, some good reading there. Was thinking under 30k, but now with this information I'd like to stay under 20k.
Appreciate all the input everyone! Nice to have help with this decision

 

[Octo2005]

You might want to start a new thread asking for stone suggestions in your budget.

Congratulations on your upcoming engagement!

 

[sledge]

We can get much more specific but I wanted to give you a general idea of what pricing is for 1.8+ carat stones, H+ color and SI1+ clarity.

The first screen capture is from HPD, which has the 80% lifetime buyback guarantee. The second screen capture is from WF, which offers a 70% buyback guarantee during the first year. The third screen capture is from BGD (their stock of 1.80ct+ stones are low right now for your specific criteria) and they too offer 70% buyback for the first year.

Keep in mind, these are super ideal diamonds meaning they have an ideal cut as defined by AGS reports, excellent hearts & arrow symmetry and cutting techniques that are proprietary to each respective vendor. They will have all reports and advanced imaging (still photos, videos, ASET, Idealscope, H&A, etc) to make an educated decision. All these companies are highly respected, offer superb customer service, keep their stones in-house and has the best of the best in terms of diamond cut & quality.

Current HPD stock:


Current WF stock (more available, but didn't want to do multiple screen caps):


Current BGD Stock:

 

[skypie]

As others have said, buying a diamond as an investment or to hold value is a bad idea. Even with the best buyback policies (80% for life) you are losing 20% of the value as soon as you walk out the door. If you are concerned with holding value/investing why not get a cheaper engagement ring (e.g. moissanite) and invest the rest of your ring budget an in index fund?

 

[Octo2005]

You could buy a preloved ring/diamond. In terms of return on purchase - you can usually buy for much less than it would cost you new. The "decrease in value" is already absorbed by the original owner, so as long as the stone is undamaged and in good condition you could potentially turn around and resell it for close to or at what you paid for it.

 

[partgypsy]

"Ah understood its not an investment, some good reading there. Was thinking under 30k, but now with this information I'd like to stay under 20k.
Appreciate all the input everyone! Nice to have help with this decision"
yes buy a diamond and ring your intended loves and enjoys wearing. Put the difference in a mutual fund ; )
If she has size 5 finger, she has small slender fingers and you will not need 2 carats to look substantial on her finger

eta if I wanted a big diamond balanced in all qualities this is the one I would get
https://www.hpdiamonds.com/en-us/diamonddetail/HPD9010

if you wanted to maximize size there is this one
https://www.hpdiamonds.com/en-us/diamonddetail/HPD8574

 

[Dancing Fire]

There are some conditions. Not many, but you need to be aware since this is a major part of your buying decision.

https://www.hpdiamonds.com/en-us/whyus/whyus-lifetime

I don't think anyone does better.

Nope , i.e., cash value on a $10K diamond after 1 yr.

We cannot calculate the value of other vendors after one year, as the price is determined only by the ability of the owner to find a buyer. The value of the Crafted by Infinity Diamond is at least $8,000 as the seller is completely entitled to accept any offer above $8,000 which is actually the floor cash value that this diamond has during the lifetime of the original buyer, so just in case you needed emergency cash go with CBI.