It has always been a topic for debate that whether diamonds are a good investment? People have always been on the pros and cons of buying diamonds. In spite of all the hullaballoos the love for these sparkly little stones have increased in the past few years. You can decide for yourself after reading the about all you need to know for buying diamonds.
Diamonds make a great investment sense. They have high intrinsic value, they’re always in mind and last forever. They’re small, portable and easy to store. Like most gems and precious metals, past performances show that they increase in value over time.
However, Diamonds make a sketchy investment potential. Diamonds come in very inconvenient packages. Unlike gold, which is valued by weight, diamonds don’t have a universal price per gram. No two stones are exactly the same. The valuation is very subjective. Choosing which diamonds to buy can be tricky at times.
Low interest rates and failing markets make investing in diamonds look appealing. Investing into diamonds without the full awareness of the risks and potential pitfalls can be precarious.
- Paying too much
When investing in anything, the mantra ‘buy low, sell high’ should be served. Buying low seems harder when it comes to diamonds.
You should be buying from a registered company or you would lose instantly an amount in the form of tax. Your diamonds need to grow that much times in value to merely break even. Then there is a risk of value variation from store to store. Hence, if you buy from a reputable jeweller working on extremely low margins you can get a stunning diamond for close to wholesale prices.
Most people would like to have their diamonds mounted in a setting hence hidden costs of setting is also involved. If your diamond jewellery is valuable enough to be an investment it should probably be insured- another expense which need be recoup when you sell.
2. Expecting too much
Diamonds take time to increase in value, yet many diamond investors are disappointed when they don’t see short term results. Based on past performances, they do go up but extremely slowly. It is not realistically possible to buy a diamond and expect to book a profit in five years or so.
This means when you invest in diamonds, your money is going to be locked up for a while so its important to be sure a) you want to invest in this way b) can afford to. If you need to sell early, most probably than not you might end up losing money on your deal.
The best deal would be to buy diamonds that you love, so that you can enjoy it while you have it and you wouldn’t be disappointed if it didn’t earn you enough in the long run.
3. Buying the wrong diamond
The final hurdle in buying a diamond as investment is knowing which diamond is worth investing in. The most important thing is to buy certified. A certified diamond is far easier to resell and will be more desirable. Keep the certificate in a safe place.
The shape of the diamond can also be a factor. Round brilliant is the most popular and has a bigger resale market.
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