Expert Interview: Is Buying A Diamond A Good Investment?

Due to  unstable market and increase of  inflation, investing in diamonds can be profitable to you as an investor. The price of diamonds is being more stable as the price of any other gems. De Beers calls “forever diamonds” stones that are valuable as an investment no matter how fluctuating the market is.

Also, you can buy high-quality diamonds in jewellery or high jewellery and gift it to your relative or pass it to your heir, this can also be considered an investment.

Expert Interview

– Good afternoon everyone, today we are having Mr. Uri with us. Mr. Uri works in the diamond trading and today he would be sharing his knowledge and experience. Thank you very much for being with us today.

– Thanks for having me.

– First question is: which diamonds are the best investments?

– Well, when you are buying a diamond, you can buy it for several reasons. Either because you are looking at it as a return on investment in a short or long-term or you can buy it as an experience (e.g. ring) for a life project that you are having. I would say as a real investment we do have things that are called “Investment diamonds”.  They are quite high grade, they have a good colour and they are very rare diamonds. Let’s say like anything, diamonds are priced based on rarity and so depends on the offer and demand. So, if you are talking about extremely high-quality diamonds, then obviously it is more rare and you would get less supply, which will make then the value of the diamond increase. If you are buying it as an investment, then you are betting on the fact that the scarcity would not change. You are either buying it with the idea to maintain the value or to try to make ROI on your investment. That usually happens with very big stones. So, we are talking about 10ct and above. We are talking about very high amounts, prices for “investment diamonds”. So, obviously if you are buying it as an investment, then you would buy those.  If you are buying it to maintain value, then you can always buy a smaller diamond, that is also rare. Everything depends on scarcity.

– How much you would say is approximate price for a 1ct diamond?

– It is a very vague question. If you look at diamonds, yes, it is gemstone by itself as a category. It does have a lot of criteria that comes into value. I can’t give you a specific number. There is something called “4Cs” by GIA (GemologicaL Institute of America), which is a reference, when we are talking about buying white diamonds. So, you base yourself on the colour, on the carats, on the cut and the clarity – these are the 4Cs. And depending on these criteria, prices can vary a lot from more colourless diamonds to a more less clear diamonds, let’s say. 1ct diamond can go quite high, especially if we are talking about even coloured diamonds, there is also that that comes in, when you talk about diamonds. So, I can’t really answer you with the number, other than the fact that it is also based on something called “Rapaport”. The Rapaport is kind of like an index that all diamond dealers use and we use that to establish the price. It is like a market. There is a market with supply and demand that changes everyday. We get a sheet and you can evaluate the price based on that.

https://youtu.be/pDyP70rLgRk

– And why diamonds have no resale value?

– I wouldn’t say that they have no resale value. They can have lower resale value like everything if you are buying something. If you go to buy watch, car or anything, then once you buy it, then you are factor in a lot of things. You factor in: the brand, the margin that person is making and etc. When you are talking about buying a diamond, you are talking if it is a professional jeweller, if it is someone in the industry, if it is a dealer, if it is a private person and then customer. Obviously, the margins that will differ. And there is a markup on the price that we are buying diamonds at. So, based on that, you are going to get a cheaper offer for what you bought initially. If you buy a brand, you are already tripling the value of what you are buying. If you are buying any ring, you are obviously buying an added value into the brand name. Just a diamond from a random jeweller, usually if it is bought  at the fair price, then you would not have a big loss, that is for sure. You would not loose all of your money, but you will facture the fact that the person made a margin on you, unless you are buying it straight from a diamond dealer, which most people would not do, because they don’t have the access to that market.

– Ok, thank you. Would you say that the old diamonds are more valuable?

– Well, I am not an expert in old diamonds. I know that there are different cuts that exist. I work a lot with different dealers. And I have recently got an offer for something called ” old mine cut”  that do not exist anymore. “Old mine cut” is a cushion cut (looks like a square diamond) today. They don’t have necessarily more value. They are rare, because obviously they are old. Again there are a lot of things that vary into it. The wight of an old diamond would not be the same compared to the new diamond. It is a very complicated thing. It wouldn’t necessarily be a good investment to buy an old diamond more than a new one.

– Generally speaking, would you say that diamonds are considered to be a good investment nowadays? 

– Well,  for coloured diamonds you would see a clear curve  if you look at the last auctions in the past few years. The biggest one is being in Geneva at the end of the year, then you have a lot of potential for investment in big diamonds. We  are talking about 10ct and usually high-colour grades usually “D”, “E” and internally flawless diamonds with type 2, which means that it is the highest category of diamonds colour as a white clear diamond. Or you could say that the blue, yellow , pink, red, green diamonds have “fancy” colours. There are a lot of coloured diamonds, but mostly people don’t know about them. Some of them are extremely rare, which makes them extremely valuable. Red diamond is actually the most rare diamond that ever exists. So, that’s the most expensive diamond you can find, carat to price wise we are talking. But, there has been a big trend on blue or pink diamonds. Some jewellers actually made a business out of it. The value we are talking are 7 figures and ahead.

– Ok, thank you very much Mr. Uri for sharing with us your knowledge and for your time also. We would let you know if visitors of the blog would have any questions. Have a nice day.

– Thank you, have a nice day.

I hope you have enjoyed reading this blog as well as watching the interview and I am looking forward to further discussing this topic with you below in the comments.