Playing devils advocate...

[Carats]

On one of these threads the other day, I read that the resale value of a diamond is around 50-60% of the original purchasing price. This really scared me inthat everyone always says that a diamond is a great investment - if it is such a great investment, it would have a greater resale value (not less). Taking this into account, I began to wonder...if i am looking to purchase a GIA stone because it gives the stone legitimate certifcation, why pay more since I will never in all likelhood resell it? If I went with an egl, for ex, now, then i would be paying less upront and since i''m not worried about resell, i wouldnt have to be concerned about the resell value. ALso, even though its harder to judge egl, i think between the hca, idealscope, proportions, and the help of pricescope, we should be able to assess the relative quality of the diamond.

Any thoughts?

 

[Lorelei]

Date: 7/12/2007 8:57:09 AM
Author:Carats
On one of these threads the other day, I read that the resale value of a diamond is around 50-60% of the original purchasing price. This really scared me inthat everyone always says that a diamond is a great investment - if it is such a great investment, it would have a greater resale value (not less). Taking this into account, I began to wonder...if i am looking to purchase a GIA stone because it gives the stone legitimate certifcation, why pay more since I will never in all likelhood resell it? If I went with an egl, for ex, now, then i would be paying less upront and since i'm not worried about resell, i wouldnt have to be concerned about the resell value. ALso, even though its harder to judge egl, i think between the hca, idealscope, proportions, and the help of pricescope, we should be able to assess the relative quality of the diamond.

Any thoughts?

May I ask who told you this Cts?

In any case diamonds don't seem to be a good investment, tons of them for sale all over the place with no takers for resale, people post here all the time asking for advice on reselling and the best we can do is inform them of what they might be lucky to recoup ( 50%>url]

I went with EGL for various reasons, as I don't intend to sell or trade in this diamond, wanted more size for a lower price tag and found what I wanted for the right price. For someone like me who knows what they want and are fairly sure it will remain what they want, then this is a good option. But in case you might want to ever resell or trade, a GIA or AGS report will make the diamond more desirable to dealers and buyers, as they are said to be the industry leaders for lab grading and therefore easier for you to use your options. Also it is a matter of ' mindclean' as we say around here, or confidence, in having the GIA or AGS report, that you have no question, what you paid for. It depends on your personal priorities, however an independant appraisal is always prudent if buying a diamond graded by other labs, to make sure the colour and clarity check out. This and with the technologies available, Pricescope and the wealth of education up for grabs can make buying this type of diamond an option certainly, if that is what you want and are willing to spend the time in searching and comparing.

 

[neatfreak]

Unless you''re buying a 30 carat D IF, collectible quality stone, DIAMONDS ARE NOT AN INVESTMENT.

They DO have horrible resale value, but there are three different main reasons that it seems people want certed stones IMO.

1. There is a theory circulating (and I don''t have enough personal knowledge to know if it''s true or not) that the best stones get sent to GIA or AGS because then they can command much higher prices. Stones that won''t grade well are then sent to EGL or not sent at all, because then they can call them higher grades than they really are. Most consumers are unaware of this when they purchase a stone, thus, they think that a E VS2 ideally cut RB from EGL-Israel is the same as an E VS2 ideal cut RB from AGS, except with the smaller price tag. People don''t realize that they might be getting something that''s a few grades lower. So for assurance that they get what they pay for, they pay the higher price tag for AGS/GIA stones. It''s a small price to pay to make sure you''re getting what you pay for.

2. GIA/AGS stones DO have a significantly higher resale value than other certs or non-certed stones. So you are somewhat protecting what little resale value you might have by getting a certed stone.


3. Most people don''t even KNOW what an Idealscope is, or what compromises an ideally cut stone. So having a qualified cert from AGS/GIA TELLING you it''s the best cut out there is very valuable to the uninformed consumer. Same reason why many people will pay extra for a stone from Tiffany''s, because they KNOW that it''s a pretty darn good stone with little other info.


At least that''s the way I see it!

 

[decodelighted]

Date: 7/12/2007 8:57:09 AM
Author:Carats
everyone always says that a diamond is a great investment - if it is such a great investment, it would have a greater resale value (not less).

I''m really curious ... WHO is telling you diamonds are great investments?? That sounds like HOGWASH to me! It just simply isn''t true for the vast, overwhelming majority of diamond buyers. That''s like saying ART is a "great investment" & thinking that applies to trinkets from the craft fair rather than DaVinci''s that are out of most people''s range! Or people saying REAL ESTATE is a "great investment" & thinking that applies to those squares of unusable desert being sold in the backs of magazines or on (ha) the internet. You have to use your COMMON SENSE.

IMO stones that are branded or have a grading from GIA or AGS have a *slightly* higher resale value than NONbranded, NONcerted stones OF SIMILAR SIZE/SHAPE/QUALITY. But it''s akin to selling a "Certified Honda" as opposed to a "Non-Certified Honda" ... NOT akin to selling a Mercedes vs. a Honda. Capiche?

As to how this info should affect your decision making ... I ask you, WHY are you concerned with resale value anyway? Relationship dynamics/values etc. aside ... It really *IS* like a car kinda ... say Honda''s have greater resale values .. but you really want a Mazda Miata ... are you going to drive around a Honda for ten years just IN CASE you wanna resell??? Or do you want the car you WANT when you WANT IT for however long you WANT IT.

 

[Madam Bijoux]

Hi! Diamonds are never an investment. (Every diamond book I read says that up front and every honest jeweler will tell you the same thing.) They should only be collected because you love to look at them.

 

[asscherisme]

I think the only people who will tell you diamonds are a great investiment are those who are trying to sell them to you.

 

[Carats]

wow, i''m really glad I started this thread.

I guess i''m definitely going with an egl...

Another question - is there any way to find diamonds individuals are trying to resell? Seems like they would be a great bargain!

 

[Regular Guy]

Carats,

In the last 10 days my opinion has changed some with respect to EGL certs, based on your questions, your contemporaries'' questions, and the answers I have heard associated with them.

I think clarity, color, cut, & carat are 4 things to do with a diamond, but there are more, that different certifying agencies test for different ones of them...and that regardless of how diamonds compare on these 4 things...there may be other things different about EGL diamonds that GIA & AGS would have tested for (HPHT treatments, laser drilling, unnamed other things) that EGL may or may not have...and if I wish to be conservative, I may choose to just not consider EGL for these unnamed characteristics, and judgements about them.

Until more education is provided here about these nuances...I am more comfortable restricting recommendations to just GIA and AGS.

If I want a car...I may know I want one that could be fast, but I''d want to know someone has checked the motor, and has verified it will run a long time....that the bottom won''t fall out. Maybe this is too cautious. I''ve asked for more discussion on this. We''ll see if it comes.

I don''t know that there are that many mysteries about diamonds...but I''ve become anxious enough recently about this...at least for specifically non EGL USA...that I guess I have a new position on this.

Regards,

 

[Carats]

Date: 7/12/2007 10:40:07 AM
Author: Regular Guy
Carats,

In the last 10 days my opinion has changed some with respect to EGL certs, based on your questions, your contemporaries'' questions, and the answers I have heard associated with them.

I think clarity, color, cut, & carat are 4 things to do with a diamond, but there are more, that different certifying agencies test for different ones of them...and that regardless of how diamonds compare on these 4 things...there may be other things different about EGL diamonds that GIA & AGS would have tested for (HPHT treatments, laser drilling, unnamed other things) that EGL may or may not have...and if I wish to be conservative, I may choose to just not consider EGL for these unnamed characteristics, and judgements about them.

Until more education is provided here about these nuances...I am more comfortable restricting recommendations to just GIA and AGS.

If I want a car...I may know I want one that could be fast, but I''d want to know someone has checked the motor, and has verified it will run a long time....that the bottom won''t fall out. Maybe this is too cautious. I''ve asked for more discussion on this. We''ll see if it comes.

I don''t know that there are that many mysteries about diamonds...but I''ve become anxious enough recently about this...at least for specifically non EGL USA...that I guess I have a new position on this.

Regards,

hmm thats a really good point you make. but i guess, if you are never going to resell it and the price is right, why not?

 

[Lorelei]

If you look at the link I posted, that will give you some idea of where to look for seconday market diamonds. You can also check Pearlmans which is a PS vendor as Bill sometimes has diamonds on consignment.

Also I agree with what you say about EGL diamonds, having been a happy purchaser myself, but I have been buying and coveting diamonds and learning about them for many years and well before PS, so I am fairly sure what I want will stay being what I want, so I won't need to trade it or sell. If you are new at this then you have much to consider which is the best way for you to go if you are just starting out, my rock now is my forever rock and it took me a long time to get there!

http://www.pearlmansjewelers.com/jewelry-specials/

 

[decodelighted]

Not sure I agree with your logic/decision to rule out GIA and AGS stones (I prefer a good cert even though I NEVER plan to resell) ...

But to answer your question ..

Date: 7/12/2007 10:37:47 AM
Author: Carats
is there any way to find diamonds individuals are trying to resell? Seems like they would be a great bargain!

I remember checking out some e-bay like website that was trying to match private e-ring sellers with buyers. Can''t recall the name & can''t say it looked good when I went there ... seemed like maybe it wasn''t really "private sellers" but a way for pawn shops & grey market folks to sell stuff. Never saw anything DESIRABLE. But if you google around you can probably find it. They got some press maybe 6 months/ a year ago??

Craigslist is also a place that has private seller classifieds -- though I would be EXTERMELY careful (i.e. - have the stone/ring inspected by an INDEPENDENT appraiser of your choice and pay only through safe means AFTERWARDS).

Signed Pieces & Pearlmans Jewelry are two Pricescope vendors who deal in "previously owned" jewelry. Search around for more info on them using the search bar above.

And local pawn shops or vintage jewelry stores or even regular jewelry stores sometimes sell antique pieces or pre-owned pieces. There are bargains to be had -- but you have to get over the possibility of "bad mojo"

.

Hope that helps.

 

[Regular Guy]

Date: 7/12/2007 10:53:59 AM
Author: Carats

Date: 7/12/2007 10:40:07 AM
Author: Regular Guy
Carats,

In the last 10 days my opinion has changed some with respect to EGL certs, based on your questions, your contemporaries'' questions, and the answers I have heard associated with them.

I think clarity, color, cut, & carat are 4 things to do with a diamond, but there are more, that different certifying agencies test for different ones of them...and that regardless of how diamonds compare on these 4 things...there may be other things different about EGL diamonds that GIA & AGS would have tested for (HPHT treatments, laser drilling, unnamed other things) that EGL may or may not have...and if I wish to be conservative, I may choose to just not consider EGL for these unnamed characteristics, and judgements about them.

Until more education is provided here about these nuances...I am more comfortable restricting recommendations to just GIA and AGS.

If I want a car...I may know I want one that could be fast, but I''d want to know someone has checked the motor, and has verified it will run a long time....that the bottom won''t fall out. Maybe this is too cautious. I''ve asked for more discussion on this. We''ll see if it comes.

I don''t know that there are that many mysteries about diamonds...but I''ve become anxious enough recently about this...at least for specifically non EGL USA...that I guess I have a new position on this.

Regards,

hmm thats a really good point you make. but i guess, if you are never going to resell it and the price is right, why not?

I tried to say this in a previous thread...but was stricken...so I''ll try to say it a different way now.

Why get a diamond at all, specifically. Why not get something with many of the features of a diamond...that looks a lot like a diamond...but costs severely less...if you just want to capture, to the eye, all of the visible features of a diamond?

Investment issues are not relevant to this discussion, to my mind.

Why buy a diamond at all?

 

[diamondseeker2006]

I am in a hurry so I did not read all the posts. Why get GIA or AGS? Because they are more reputable and accurate. To compare apples to apples, you''d have to compare the price of an EGL 1.0 F VS1 to a GIA or AGS 1.0 G-H, VS2-SI1. Don''t think you''ll find the price savings you think.

 

[asscherisme]

I agree with diamondseeker. I just bought a new diamond and after my husband and I decided on an E or F color stone and a VS1 or VS2, we wanted to know we were getting what we paid for. I don''t have plans to ever sell it but I also want to know I got what I paid for. AGS and GIA are more strict with their grading than EGL. I did not consider EGL for that reason and ended up buying a GIA stone. If I were to have considered an EGL stone, I would have had it independently appraised BEFORE I was committed to keeping it.

Even with my new GIA stone, I had it independently appraised.

 

[Regular Guy]

Date: 7/12/2007 11:34:36 AM
Author: diamondseeker2006
I am in a hurry so I did not read all the posts. Why get GIA or AGS? Because they are more reputable and accurate. To compare apples to apples, you'd have to compare the price of an EGL 1.0 F VS1 to a GIA or AGS 1.0 G-H, VS2-SI1. Don't think you'll find the price savings you think.

No particular offence to you DS (because your patter is consistent to what most people say here), but the word "reputable," to my mind, and in support of where Carats is going...is a too convenient catch phrase...that is easy to apply if you're loaded...or if you don't mind just hanging in the corner with the "white guys," or whatever, as you like.

Naming the culprits is really the essence of the spirit of this post, isn't it? If you don't care about the difference in some thousands of dollars, naming the difference with respect to the broad brush of "reputation" is easy, and you also, this way, don't have to feel too stupid in making the choice.

But...some specific, nameable differences that can't be assigned so easily away by accountably named differences, which can be adjusted for...that's what Carats was getting at...let's give it to him!

(edited to add...) the last 1 1/2 pages of this thread give more background...

 

[kcoursolle]

I purchased stones that are AGS/GIA, b/c I like to get what I pay for and often EGL is less strict. Diamonds are not really all that great of an investment, so I wouldn''t really even think about that when purchasing one.

 

[Regular Guy]

Date: 7/12/2007 11:44:11 AM
Author: Regular Guy

(edited to add...) the last 1 1/2 pages of this thread give more background...

Sorry, above, I meant to link to this thread...

 

[decodelighted]

Date: 7/12/2007 11:06:25 AM
Author: Regular Guy
Why get a diamond at all, specifically. Why not get something with many of the features of a diamond...that looks a lot like a diamond...but costs severely less...if you just want to capture, to the eye, all of the visible features of a diamond?

Well ... I'm not Carats ... but I'll answer - since this is turning into a philosophical discussion

A: Because I *want* a *diamond*. I'm a purist.

If someone ask you what kind of car to get would you say ... "How 'bout Skateboards??" They get you from place A to place B and are great for the environment! But they are not CARS. How 'bout GO-KARTS ... some of them are SHAPED like cars -- and only differ on the INSIDE?? Or what about a cardboard cut-out of a CAR? Sound like a good deal? QUITE the bargain!

 

[DBM]

the main investment opportunities that lie in buying a diamond are in the larger sizes (3 ct, maybe 2, and high qualities D-E-F, FL, VVS). over the past few years these stones have risen significantly so much so that anyone who purchased these stones a few years ago would be wise to get them re-appraised and adjusted on their insurance in case of a loss.

 

[Regular Guy]

Date: 7/12/2007 12:47:05 PM
Author: decodelighted

Date: 7/12/2007 11:06:25 AM
Author: Regular Guy
Why get a diamond at all, specifically. Why not get something with many of the features of a diamond...that looks a lot like a diamond...but costs severely less...if you just want to capture, to the eye, all of the visible features of a diamond?

Well ... I''m not Carats ... but I''ll answer - since this is turning into a philosophical discussion

A: Because I *want* a *diamond*. I''m a purist.

If someone ask you what kind of car to get would you say ... ''How ''bout Skateboards??'' They get you from place A to place B and are great for the environment! But they are not CARS. How ''bout GO-KARTS ... some of them are SHAPED like cars -- and only differ on the INSIDE?? Or what about a cardboard cut-out of a CAR? Sound like a good deal? QUITE the bargain!

Did you see Borat? He did pretty good!

 

[Regular Guy]

Date: 7/12/2007 1:21:49 PM
Author: DBM
the main investment opportunities that lie in buying a diamond are in the larger sizes (3 ct, maybe 2, and high qualities D-E-F, FL, VVS). over the past few years these stones have risen significantly so much so that anyone who purchased these stones a few years ago would be wise to get them re-appraised and adjusted on their insurance in case of a loss.

Daniel,

Do you have anything else to say?

From your site, it seems like you decide to draw a line...offering a) GIA b) AGS, and c) EGL USA.

Why EGLUSA? Why not EGL otherwise?

 

[JohnQuixote]

Date: 7/12/2007 1:21:49 PM
Author: DBM
the main investment opportunities that lie in buying a diamond are in the larger sizes (3 ct, maybe 2, and high qualities D-E-F, FL, VVS). over the past few years these stones have risen significantly so much so that anyone who purchased these stones a few years ago would be wise to get them re-appraised and adjusted on their insurance in case of a loss.

We have encouraged this with clients.

Preying on this, Rapaport is proposing an index that can be traded as a futures contract (perhaps on the stock market). They would be in collection colors and high clarities as Daniel outlines.

See Garry''s post of 7/2 on down in this thread: https://www.pricescope.com/community/threads/diamond-prices-soon-to-follow.64572/

 

[CaptAubrey]

Date: 7/12/2007 1:54:07 PM
Author: JohnQuixote

Preying on this, Rapaport is proposing an index that can be traded as a futures contract (perhaps on the stock market). They would be in collection colors and high clarities as Daniel outlines.

See Garry''s post of 7/2 on down in this thread: https://www.pricescope.com/community/threads/diamond-prices-soon-to-follow.64572/

It''s worth mentioning that the much-vaunted $1 million-plus diamond fund went nowhere. This is quite notable considering how all sorts of other unorthodox private equity funds have fared in recent years.

The fundamental problem with these derivative ideas is the lack of transparency in wholesale pricing, a state that persists because too many of the major players prefer it that way.

I don''t know anyone in the diamond community--outside the parties directly involved in promoting these schemes--who thinks a cash-settled futures market would be a good idea. Indeed, most see it as dangerously speculative.