Friday, August 16, 2013

Knowledge Is Required When Investing In Diamonds

By Daniel Chapman


Fancy blue diamonds have become much more valuable within the last four decades. In fact, they are 100 per cent more valuable. The ones named fancy pink double in cost in seven year increments. The same is true of the fancy yellow stones. Investing in Diamonds seems to follow trends in jewelry. These colored gems have become better investments than their clear counterparts.

They increase and decrease in value in response to the economy. The colored ones are rare and for that reason continue to grow in price. However, that is not the sole reason for an investor to take interest in buying the colored variety.

The interest is partially due to the fact that the majority of countries do not impose a rule that their value be reported and taxed. Plus they do not take up much space to keep over time. They are always easy to carry for sales purposes. Colored ones are often hoarded by the jewelers who are not interested in selling them.

To clarify how rare they are, out of mining 10,000 carats of diamonds, colored stones make up only one carat. Some colors are pricier than others. While the currently popular brown, also called chocolate, are only modestly rare, the red, green, violet and blue are considered extremely rare.

There are two ways to invest. The investor can buy stock in a company that mines them. Alternatively, he or she can buy the actual gem stones. Colored ones are not always available, however. Their exceptional beauty for the purpose of making jewelry makes them high cost and hard to find.

Every good investment has some drawbacks. In the case of diamonds, they are not capable of being sold quickly. Each stone must often be evaluated by an expert before anyone will buy it.

While gold and silver can be quickly sold because the price is fixed depending on weight, there are many other factors besides carats that the price of a diamond is dependent on. One stone might be clearer or brighter than another. Only an expert, mainly a jeweler, can correctly identify the value of one of these precious gems.

There are numerous factors to consider when evaluating these gem stones. Two of equal carat weight can have different price tags. One or the other may be brighter or more skillfully cut. While gold and silver are measured by weight, it is difficult to gauge if one diamond has more monetary value than the other.

The community of jewelers have long wanted to create a method of pricing diamonds. That would make it easier to popularize investing in Diamonds. But, there are too many qualities that depend on subjective evaluation to make it feasible. There is a vast difference between a fine stone used to make jewelry and a low grade one used to make a glass cutting tool.




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