Investment stones

[foamblue]

I am looking to diversify my portfolio and I am thinking of getting some investment diamonds which we will keep for 5-10 years. The original plan was to get 3 fancy intense/vivid pink or blue stones, as those colours constantly seem to be increasing. The sizes will approximately be 0.50ct-0.70ct. However, I think it may be better to only get 2 fancy pink/blue stone then purchasing another 1-2 white stones for better liquidity instead of a 3rd pink.

It will all be purchased at wholesale/trade prices so there will be no retail mark up, however I was just wondering what people's advice would be? I appreciate that it will take long to sell the 2 fancy color stones however that is why I am trying to diversify it by investing in 1-2 white colour stones so if I ever need the funds, then it should be easier to liquidate the 3 white stones.

Also, can I ask which white stones tend to give the best returns? I am thinking of looking at 2ct Internally Flawless/VVS1 stones, as I am thinking of getting anything which is more premium/rare as opposed to 1ct VVS's or VS's which are abundant.

 

[musicloveranthony]

I have a hard time believing any luxury commodity is a good investment. Realistically, they're only a good investment if there's a guaranteed future buyer

 

[DejaWiz]

I have a hard time believing any luxury commodity is a good investment. Realistically, they're only a good investment if there's a guaranteed future buyer

I agree. Unless the rarest color diamonds that are being purchased are truly at wholesale prices so there's tangible instant equity from day one, diamonds can be a tough sell in the secondhand market. "Tangible" being the variable that will differ from one person to another. Meaning, what I see as at least $500/CT immediate equity being acceptable, another may feel $100/CT immediate equity is acceptable with eyes to the future for growth.

 

[whitewave]

I am looking to diversify my portfolio and I am thinking of getting some investment diamonds which we will keep for 5-10 years. The original plan was to get 3 fancy intense/vivid pink or blue stones, as those colours constantly seem to be increasing. The sizes will approximately be 0.50ct-0.70ct. However, I think it may be better to only get 2 fancy pink/blue stone then purchasing another 1-2 white stones for better liquidity instead of a 3rd pink.

It will all be purchased at wholesale/trade prices so there will be no retail mark up, however I was just wondering what people's advice would be? I appreciate that it will take long to sell the 2 fancy color stones however that is why I am trying to diversify it by investing in 1-2 white colour stones so if I ever need the funds, then it should be easier to liquidate the 3 white stones.

Also, can I ask which white stones tend to give the best returns? I am thinking of looking at 2ct Internally Flawless/VVS1 stones, as I am thinking of getting anything which is more premium/rare as opposed to 1ct VVS's or VS's which are abundant.

I’ll tell you what my CPA told me when we said we wanted to build a beach house to diversity the portfolio: “no. If you want a beach house to enjoy, that is one thing. In terms of diversifying the portfolio, your money is better in the stock market.”

YMMV. I am not giving investment advice.

In my opinion, diamonds are an asset for your net worth. They are not, and never should be investments. Plus, with lab created stones as good as they are, for all we know, mined diamonds are going to be worth less in 20 years.

 

[whitewave]

It also sounds like someone is playing you. You are getting conned. It sounds like this isn’t your idea, but someone else’s who is trying to get rid of some stones.

Ask yourself, if this is such a great plan, why is this person trying to unload these stones?

Also, in terms of pink diamonds, if you decide to do this anyway against all of our advices (we get this question about once or twice a year) I would think argyle pink or no pink. But I’m still not buying argyle pink.

 

[lovedogs]

There is no such thing as investment diamonds (maybe except museum quality stuff that normal humans can't afford). There are a million better ways to invest your money.

 

[yssie]

Investment diamonds (that can actually serve as investments) must be rare. Rare enough to guarantee that there won’t be another for a very long time, possibly ever. This is the number one requirement - this is what guarantees that value will increase over time.

A 2ct D FL/IF with no fluor is… 70-80 USD? Ish?

I’ll be blunt: In the world of diamonds a stone that’s worth 100k is nothing special. It’s not necessarily everyday, but it is commonplace. A stone that costs 100k, 200k, 300k will never be an “investment”.

Now if you were looking to spend millions, or tens of millions - you’d be able to play in the investment diamond space. Diamonds are poor investments for us mere mortals

 

[Rockdiamond]

Even if one could purchase at true wholesale prices, who’s buying these diamonds from you when it’s time to sell?
The whole idea makes it seem like liquidating diamonds is a simple, cost free deal.
Nothing could be further from the truth. When it’s time to sell, reality will rear its ugly head. Whoever is offering to sell these diamonds …. Ask them if they want to buy today, and at what rate they’re ready to buy.

 

[AllAboardTheBlingTrain]

I was always told to think of diamonds as a store of value, a thing to liquidate if you need the cash. Diamonds are not investments, unless you have millions of dollars to drop. Sure, a diamond purchased 30 years ago and sold today may give you a dollar number greater than the dollar value it was purchased for all those years ago, but it will probably barely beat inflation, if at all. Buy diamonds because you love them and to pad your assets, but they are depreciating assets of a sort, not investments.

 

[denverappraiser]

Buying diamonds is easy. Selling diamonds is hard. I’m with the above, you are almost certainly being played here.

Mind you, it IS possible to buy diamonds and sell them at a profit. I know people who do it every day. I know people who make a living off of it. It’s not as easy as it sounds. You’ll be competing with people who have million-dollar advertising budgets, hundred-year-long histories, and full-time staff for this purpose. Yeah, even at ‘wholesale’. I STILL see clients who ‘invested’ in diamonds back in the 80s, 40 years ago, who can’t unload them at cost or even particularly close to it.

The best margin on diamonds is at the bottom. Tennis bracelets full of I1/J quarter caraters. That’s also the hardest to sell if you don’t happen to own a jewelry store. Excuse me, if you don't happen to own just the right kind of jewelry store in just the right market.

About that word ‘wholesale’. It’s an illusion. Everybody’s got a guy. Everybody is a wholesaler. Google will match you up with 185,000 of them. It doesn’t mean what you think it does.

 

[denverappraiser]

Whoever is offering to sell these diamonds …. Ask them if they want to buy today, and at what rate they’re ready to buy.

Even this is problematic. The boilerroom dealers offer generous buyback/consignment deals, right up to the point where they don't. Can you say Ponzi?

 

[foamblue]

Thanks for all of the advice, I guess this makes me realise that I need to be careful and avoid it. I guess some diamonds as a store of value (instead of investment) might sound ideal, however I would need to make sure it was some diamonds that can be easily liquidated for that. Not some $70k IF diamonds.

In terms of the person who is selling me the diamonds, they have not sourced them yet. They are a trader that supplies some of the stones which we use in our engagement rings. It was myself that asked them if they could source them, and they gave a couple of tips on what sort of things they will look out for (i.e if pink or blue then preferably fancy intense/vivid) and if we did white diamonds then preferably the higher quality stones

However, they did advise that they cannot advise on the future returns of these diamonds since it's unpredictable but that they would try to source the stones which they think are most likely to increase in value or have a high demand.

For example, a few weeks ago they contacted me and informed me that they were being offered a rare D colour stone that was XXX and had no fluorescence. The diameters were larger than usual so it was the same size as other higher carat diamonds and apparently there were only 2 of those in the world. Due to this, they felt that the diamond would be worthy of investing in because if anybody would want to buy it, then only 2 people in the world would have it.

However, liquidity is always a worry for me like you guys said, but I guess if we have enough contacts with different traders then they can try to find buyers for the stones over a few months. I appreciate that it is not something which you can sell within a day like gold, but if we compare it to something like properties, then that could take up to 1 year to sell, which makes liquidating diamonds over 4 months seem OK. As long as there is a little return, although based on the posts above, it seems like nobody is confident in the diamond prices increasing for diamonds worth in the $30k-$70k range.

 

[foamblue]

What do you guys think of this 10 year Rapaport report? It seems like the 3ct+ diamonds had great returns.

https://www.diamant-gems.com/wp-content/uploads/2017/02/rapaport-prix-diamant-10-ans.pdf

 

[mwilliamanderson]

they contacted me and informed me that they were being offered a rare D colour stone that was XXX and had no fluorescence. The diameters were larger than usual so it was the same size as other higher carat diamonds and apparently there were only 2 of those in the world.

@foamblue The statement I quoted sounds suspect. If the diameter is larger than other higher carat diamonds it was cut shallow to spare carat weight. This doesn't make it rare, just potentially poorly cut. Also, D may be the highest color grade, but not so hard to find if you're willing to pay for it.

In all my years here, I have never read such a consensus of opinion among the various members here. It's really quite remarkable, lol.

 

[lovedogs]

This person is playing you, period. There are a million poorly cut D color stones that look bigger than their ct weight due to poor cut. You wont be able to profit from this. Not even close. Run away.

 

[denverappraiser]

Only 2 in the world? You only mentioned color but I recall mentioned above of IF and 2 caraters without fluorescence. Here' s 41 D/IF/xxx/GIA.2.0x's available for immediate delivery in the US alone. About 2/3 of them have no fluorescence but the database doesn't allow that as a search parameter and I don't want to take the time to hand sort.

Importantly, notice the prices. They range nearly 50% from 56k to 78k. They all come from the same half dozen or so highly competitive retailers. Rap is identical on all.

Diamond Search Results | Real-time Information on 1,000,000+ Diamonds | PriceScope

PriceScope's Diamond Search is the best place to find the best diamond prices. Search and compare over a million natural, lab and fancy color diamonds.

www.pricescope.com

 

[whitewave]

Thanks for all of the advice, I guess this makes me realise that I need to be careful and avoid it. I guess some diamonds as a store of value (instead of investment) might sound ideal, however I would need to make sure it was some diamonds that can be easily liquidated for that. Not some $70k IF diamonds.

In terms of the person who is selling me the diamonds, they have not sourced them yet. They are a trader that supplies some of the stones which we use in our engagement rings. It was myself that asked them if they could source them, and they gave a couple of tips on what sort of things they will look out for (i.e if pink or blue then preferably fancy intense/vivid) and if we did white diamonds then preferably the higher quality stones

However, they did advise that they cannot advise on the future returns of these diamonds since it's unpredictable but that they would try to source the stones which they think are most likely to increase in value or have a high demand.

For example, a few weeks ago they contacted me and informed me that they were being offered a rare D colour stone that was XXX and had no fluorescence. The diameters were larger than usual so it was the same size as other higher carat diamonds and apparently there were only 2 of those in the world. Due to this, they felt that the diamond would be worthy of investing in because if anybody would want to buy it, then only 2 people in the world would have it.

However, liquidity is always a worry for me like you guys said, but I guess if we have enough contacts with different traders then they can try to find buyers for the stones over a few months. I appreciate that it is not something which you can sell within a day like gold, but if we compare it to something like properties, then that could take up to 1 year to sell, which makes liquidating diamonds over 4 months seem OK. As long as there is a little return, although based on the posts above, it seems like nobody is confident in the diamond prices increasing for diamonds worth in the $30k-$70k range.

We could have a ton of posts about thar xxx stone and how it is likely a bad purchase.

 

[whitewave]

Please please please get us the certificate for that “only 2 in the world“ scam diamond. I can nearly guarantee you it’s yukky. We can educate you.

 

[whitewave]

Diamond Detail | Victor Canera

Discover the world’s most finely cut diamonds and engagement rings. We specialize in super ideal cut round, cushion & OEC diamonds hand fabricated jewelry.

www.victorcanera.com

 

[whitewave]

Blue Nile has a bunch also:

example: https://www.bluenile.com/diamond-de...NDS&track=viewDiamondDetails&catalogView=true

https://www.bluenile.com/diamond-details/LD15935245?refTab=DIAMONDS&track=viewDiamondDetails&catalogView=true

https://www.bluenile.com/diamond-details/LD17040005?refTab=DIAMONDS&track=viewDiamondDetails&catalogView=true

just a sample of them

 

[whitewave]

Oops, forgot this 10carat one

https://www.bluenile.com/diamond-details/LD16861261?refTab=DIAMONDS&track=viewDiamondDetails&catalogView=true

 

[whitewave]

Thanks for all of the advice, I guess this makes me realise that I need to be careful and avoid it. I guess some diamonds as a store of value (instead of investment) might sound ideal, however I would need to make sure it was some diamonds that can be easily liquidated for that. Not some $70k IF diamonds.

In terms of the person who is selling me the diamonds, they have not sourced them yet. They are a trader that supplies some of the stones which we use in our engagement rings. It was myself that asked them if they could source them, and they gave a couple of tips on what sort of things they will look out for (i.e if pink or blue then preferably fancy intense/vivid) and if we did white diamonds then preferably the higher quality stones

However, they did advise that they cannot advise on the future returns of these diamonds since it's unpredictable but that they would try to source the stones which they think are most likely to increase in value or have a high demand.

For example, a few weeks ago they contacted me and informed me that they were being offered a rare D colour stone that was XXX and had no fluorescence. The diameters were larger than usual so it was the same size as other higher carat diamonds and apparently there were only 2 of those in the world. Due to this, they felt that the diamond would be worthy of investing in because if anybody would want to buy it, then only 2 people in the world would have it.

However, liquidity is always a worry for me like you guys said, but I guess if we have enough contacts with different traders then they can try to find buyers for the stones over a few months. I appreciate that it is not something which you can sell within a day like gold, but if we compare it to something like properties, then that could take up to 1 year to sell, which makes liquidating diamonds over 4 months seem OK. As long as there is a little return, although based on the posts above, it seems like nobody is confident in the diamond prices increasing for diamonds worth in the $30k-$70k range.

When you sell a used diamond, you automatically lose about 30% of what you paid. You are a consumer and not a wholesaler

 

[foamblue]

At least it's good that I came on here, as I managed to avoid making some big mistakes! Can I ask what you guys think about the 10 year chart on Rapaport here? https://www.diamant-gems.com/wp-content/uploads/2017/02/rapaport-prix-diamant-10-ans.pdf

It seems to suggest that an average of 100% increase for the 3ct white diamonds if it's a mininmum of VVS2/F over 10 years, if I ever do this, I want to make sure that I base my decision off a reliable source. Not what a supplier told me. I guess Rapaport's data must be the most reliable since they monitor the prices of millions of diamonds annually and they have monitored the price increases of these diamonds over the years?

Again, I do appreciate the advise that you guys are giving, I am open to any criticism, I would rather be criticised than make the wrong investment.

 

[whitewave]

Drew Brees' $6.1M jewelry lawsuit award increased by a few million; here's why

The $6.1 million verdict that jurors in San Diego awarded to Drew Brees this summer in his lawsuit against a jeweler has ballooned to nearly $9 million.

www.nola.com

 

[whitewave]

At least it's good that I came on here, as I managed to avoid making some big mistakes! Can I ask what you guys think about the 10 year chart on Rapaport here? https://www.diamant-gems.com/wp-content/uploads/2017/02/rapaport-prix-diamant-10-ans.pdf

It seems to suggest that an average of 100% increase for the 3ct white diamonds if it's a mininmum of VVS2/F over 10 years, if I ever do this, I want to make sure that I base my decision off a reliable source. Not what a supplier told me. I guess Rapaport's data must be the most reliable since they monitor the prices of millions of diamonds annually and they have monitored the price increases of these diamonds over the years?

Again, I do appreciate the advise that you guys are giving, I am open to any criticism, I would rather be criticised than make the wrong investment.

Don’t do it. Seriously, don‘t. It’s a stupid investment.

BTW, will you offer an upgrade policy?

Here on pricescope, we have many people upgrading a 3/4/5 carat Diamond with the vendor for 5/6/7/8 carats.

why would anyone buy from you? What incentive would they have given that you seem clueless on this. (I applaud you for coming here and starting this thread). You also don’t have an upgrade policy.

 

[whitewave]

your guy lied to you when he said only two in the world. why you didn’t drop him like a hot rock and leave so fast you left skid marks frustrates me.

ill be leaving this thread now because it’s making me ticked off.

I hope you make good decisions with your money by consulting wealth professionals you pay to made good decisions about your money.

 

[lovedogs]

The issue is that you aren't a vendor. So no one is going to buy a valuable stone from you when they can buy from a vendor w a return policy and/or upgrade policy. You simply won't see a return on buying a stone with the intent to sell later.

 

[yssie]

why would anyone buy from you?

This is the heart of the problem with using rap as your profit baseline.

Diamond dealers - with reputations and inventories and marketing budgets and dedicated personnel - use rap as their sales baselines. You have none of those, so no one is going to buy a stone from you anywhere near rap value. They can just go to any number of wholesalers, just like you are thinking of doing right now.

The only exception to this is if the stone you have is truly rare. Not something those potential buyers could just go to a wholesaler for themselves. But like I said earlier - you need to be spending millions to take ownership of those sorts of rarities.

 

[seaurchin]

Also, I wonder if mined diamonds might become the new furs sometime in the future; in other words, largely shunned.

I forgot how many tons of earth have to be dug up for each carat of mined diamond but the lab diamond ads are hitting hard with lab diamonds being the ethical, responsible, conflict-free choice and they're becoming very popular, so who knows.

Diamonds are not a need and don't really serve any purpose other than the luxury definition we give to them so I'd guess that's always something subject to change.

 

[denverappraiser]

Rap is a work of fiction. Well, not exactly fiction, but it’s a version of MSRP for diamonds. Real prices vary wildly within a particular Rap category, as I pointed out above. Wholesale in the diamond business is a complicated affair. Rapaport is involved in it, but it’s not the same as the price sheet in the magazine.

Check out these guys:
https://icecap.diamonds

By way of disclosure, I’m not particularly endorsing them, and I'm personal friends with some of the principals. I link them here because they and their advertising are directly aiming at the investment market. Most of their customers never take possession or even see their purchases. They’re selling diamonds as financial instruments and only secondarily as a fashion item. You can take delivery of a stone but it’s not really the point. It's a relatively pure investment play in physical diamonds (as opposed to Rio Tinto or Signet stock which are tangential investments in the diamond business).