Are Diamonds a Good Investment?

are diamonds a good investment

Did you know the largest diamond ever discovered was 621 grams? That means the diamond was over 1.3 pounds!

Pretty impressive, considering today, the average diamond most people wear is not even a gram in weight!

Diamonds have been a symbol of wealth, elegance and commitment for years, and now, many people wonder – are diamonds a good investment?

Everyone knows how lucrative investing in gold can be, but do diamonds offer the same value retention? That’s a good question and one you can learn more about by reading the information here.

Facts About Diamonds

Something you probably already know is that diamonds are made of carbon. Something you may not know is that, naturally, diamonds take between one and three billion years to form in nature. To help “speed up” the process, many companies now make artificial diamonds in a lab.

Industrially, diamonds are considered one of the hardest known materials on the planet, both on the Mohs and Vickers scale. The only material that has been discovered that’s harder than a diamond is another type of diamond.

Learning about diamonds is the first step in figuring out if they make a smart investment. Take some time to discover more about this impressive rock before making an investment.

When Are Diamonds a Good Investment?

The fact is, similar to gold bars, diamonds keep up with inflation. However, for many, the challenge of investing in diamonds is the price. Diamonds are expensive, and it can take quite a bit to purchase just one.

Another challenge is how to accurately price diamonds. Similar to commemorative coins, there is a huge disparity between the wholesale value and retail price of the diamond you choose to purchase.

There’s also the issue of liquidity. Selling a diamond can prove extremely challenging, and you often have to offer a huge discount just to get it sold. This is partly due to the difficulty related to authenticating a diamond.

Advantages of Investing in Diamonds

While the above challenges may give you something to consider before investing, there are also quite a few advantages offered by this investment.

Learn more about these, here.

Investment Stability

You are making a safe investment when you choose diamonds. This is because they maintain their value, even in economically uncertain times.

Similar to gold, diamonds remain completely unaffected by any drop in the financial market. Also, unlike cryptocurrencies and other, newer investment options, diamonds are a tangible asset with fewer life spans. As a result, they retain their value when other investments may have diminished value over time.

Practical and Personal Value

When you invest in gold, you can’t use it. It has to be locked away in a safe or safe deposit box.

However, with diamonds, you can use them. They signify wealth and commitment. Diamonds aren’t just an investment that can help you grow your wealth, they are also a usable item that provides long-term value.

If using the diamonds isn’t something you’re interested in, they still make sense as an investment.

By investing in diamonds now, you may be able to sell them down the road for a profit. When you do this, you can avoid having to take out a loan to purchase a home or even a new dental practice.

High Value and Low Weight

Diamonds offer an extremely high value for their volume and weight. This means they are easy to both transport and store.

Tips for Investing in Diamonds

Now that you see the many benefits offered by making a diamonds investment, you may need some tips to move forward.

Use the tips here to ensure your diamond investment is successful.

The Basic Requirements

Prior to investing in diamonds, be sure the investment you make meets these minimum requirements:

  • Resale liquidity
  • Price transparency
  • Quality certification
  • Market access
  • Expert guidance

You need to try and purchase a diamond close to the price you can resell it for. Purchasing a diamond at retail and reselling it at a wholesale price isn’t a good idea. To avoid this, connect with an expert who has direct access to international dealer markets and prices.

You also need to confirm the quality of the diamond you want to buy. Do this through an independent third-party to ensure you receive an accurate assessment.

Invest in the Basics

While expensive, large, fancy color diamonds are appealing, these aren’t traded much and don’t offer the timely resale liquidity of traditional diamonds.

Unless you have access to unlimited funds, it’s best to stay away from these spectacular diamonds.

The pricing for these is highly speculative and this stone is usually difficult to resell down the road.

Quality Certification

If you are investing in a diamond, make sure it is graded by the GIA – Gemological Institute of America – and that the grade is confirmed by an expert.

The GIA is considered the main grading authority for diamonds; however, just because a diamond has this report, it doesn’t mean it’s a good diamond.

Have an expert check to see if the diamond meets the Rapaport Specification 2+ quality standard, too.

Transactions Costs

Depending on the size of the investment you are making, the costs for buying a diamond typically range between two and five percent.

In addition to finding out about the transactions costs, be sure to find out the bid/ask spread. This is the price difference between buying and selling the diamond.

You want to know what you may get down the road for the diamond you are investing in.

Be Informed Before Investing in Diamonds

The answer to the question, “are diamonds a good investment” may be different for everyone.

It’s important to consider the factors here before making any type of investment. You also need to know how to make a smart investment and one that will help you grow your wealth in the long run.

The fact is, investing in diamonds now, may help you expand your dental practice later on. If this is something you’re interested in, visit our website. You can also find dental positions near you if you are looking for a change of scenery.