This is the reason why the value of gold and silver has increased lately. As for the diamond, its value far exceeds that of gold, silver and any precious stone. Investing in pink diamonds would be a solution to consider.
Why invest in pink diamonds?
The use of pink diamond as an investment and as a financial hedging tool has grown rapidly in recent years. The reasons are pretty obvious.
1. Pink diamonds do not take place
Pink diamonds have always been used as an excellent means of transfer. The fact that such a small stone can represent millions or even billions is impressive. You can easily keep a million-dollar diamond in the smallest safes.
2. The pink diamond is eternal
Since this is the strongest material on earth, you do not have to worry about it breaking or fading. All you have to do is make sure you do not lose it and even in case of loss, it can be insured.
3. An alternative against inflation
Real estate, gold, silver and gemstones like pink diamonds are gaining value with inflation. Unlike the others, diamonds are more durable and mobile. This is also the reason why, even if you do not want to buy pink diamonds to invest in it, you can still buy some just to save some money.
4. An investment within sight
You can hold your investment in the hand, watch it for as long as you want and even wear it. It makes you feel safer unlike actions and other financial items that are only verifiable on your computer screen.
5. Pink diamonds: a better investment
Know that only 1 in 10,000 diamonds is a diamond. Because of its rarity the value of a colored diamond can be 50 times higher than a white diamond and is likely to continue to evolve as demand continues to grow. Investing in pink diamonds makes sense.
How to invest in pink diamonds?
The pink diamond investment should be put in the category of alternative investments with all that entails. This means that your investment should be only a small part of your entire economy.
As mentioned, investing in pink diamonds is based on the fact that diamonds are physical materials. As such, you can easily buy them anywhere and even online. The recommendations below are basics, tips and tricks to carry out your investment.
1) Know at least the basics
The first thing you need to do is learn the basics, especially the diamond language. Start with the 4 C diamonds that are: carat, cut, color, clarity (carat, size, color, purity). The 4 C’s are even more important if you want to invest in pink diamonds.
2) Establish a budget
You have to keep in mind that the budget to invest in pink diamond should be just a part of your savings. Although the amount needed is a bit higher, this should not be a reason to put all your savings in a diamond. Be patient and make sure you have enough to invest before you take this path.
3) To know how to diversify pink diamonds
It is important not to put all the eggs in one basket. In pink diamond investment as in other investments, it may be wise to manage your budget well in order to diversify your purchases. If you have, for example, defined a budget of 20,000 euros for your investment in pink diamonds, you should consider buying 2 diamonds of 10,000 euros.
Also, avoid buying two or three diamonds of the same type. If you have a crush on a diamond, it would be better if the second diamond is blue, green or even yellow because you are not able to predict the evolution of their value and, more importantly which will be easier to sell later.
4) Know how to compare prices
With the huge amount of online retailers, you can easily compare the asking prices for similar diamonds. However, this is proving to be more difficult and requires more work with regard to diamonds where each diamond is different.
5) Be logical in investing in rare and sought after stones
You will have no interest in buying something that everyone already has. Indeed, if you buy a pink diamond while many are the same type, it will be difficult to sell when you liquidate your investment. The reason is that you sell a pink diamond that can easily be bought elsewhere.
In other words, you will be competing with many other sellers. However, if you have a colored diamond like a blue diamond or a pink diamond, know that you are in the big leagues. At this time, not only is your diamond rare, but it will also be highly sought after.
6) Know what your pink diamond contains
It is strongly recommended to buy only certified pink diamonds. Do not rely on what the seller says or writes in case he is online. Always keep in mind that every minor change in the attributes of a pink diamond means a lot of money. It is better to favor diamonds with GIA certificates. It is the most famous and also the strictest gemological laboratory.
In addition, it should also be taken into account that when selling your diamonds, your buyer will probably also want to see a GIA ranking report. With regard to colorless diamonds, HRD and IGI are also considered rather strict laboratories, but when it comes to diamonds the GIA remains the only one to be the most reliable to date.
7) A pink diamond mounted or just the stone
Most of the time, when it comes time to sell your diamond, the person who buys it has their own idea of what they will do with it. It may be that like you buy it to make an investment, but very often it will be for more personal reasons.
This is why the piece on which the pink diamond is mounted may not be considered by the buyer. Only the diamond itself will be calculated to evaluate the value. That does not mean that you should not put your diamond on a jewel. A good and smart setting can very well be a great tool that will help you sell the diamond.
Good settings can highlight the colors and hide any inclusions. Indeed, most of the extremely rare diamonds that are auctioned by Christie and So the by have gone up. And do not forget that one of the advantages of mounted diamonds is that you can enjoy them while you have them.
8) Buy pink diamonds at low prices
This paragraph is an extension of the section above. Buying from a retailer means you bought your diamond after many brokers and the mediators got their share. Buying cheap pink diamonds does not mean buying cheap pink diamonds (on the contrary).
This means the highest purchase of the distribution chain that you can. Avoid intermediaries and try to buy directly from suppliers. Many pink diamond dealers and jewelers now have online stores and are thankfully ready to sell directly to customers.
9) Know how to be curious
Feel free to ask a lot of questions. Try to get closer to experts and pink diamond consultants. Use the diamond forums. In these times when communication is at its peak, you can easily find in social networks people with the same passion for diamonds that would be happy to help you. Some have probably already invested in pink diamonds and can share their personal experience with you.
Invest in pink diamonds: what are the disadvantages and risks?
Like any investment, investing in pink diamonds does not just bring benefits. It also has its disadvantages and risks that you must know before you start without discouraging you. There are three major risks and drawbacks in investing in pink diamonds.
Lack of transparency on prices
While other commodities such as gold and silver have a price index that can be tracked and verified in the stock market, diamonds do not have any. Yes, there is the price list that most diamond traders have, but that is not good enough. Indeed, the list is used as a reference and even if you can get a copy, it will not be useful for several reasons.
Among other things, it only takes into account the basic factors of carat, size, clarity and color. In the end, the price is determined by the market dictated by supply and demand. If some merchants buy pink diamonds above the price list, others may buy below these prices.
Know that a difference of 10% can mean a lot. In addition, this list only concerns white colorless diamonds. For the moment, there is still no current list (or reference) for pink diamonds.
Research is underway for how to overcome this decline, however, buying from a reputable diamond dealer remains the safest and make sure you compare prices online.
The lack of negotiability
If the purchase of a pink diamond can be easy, the sale of it turns out to be more complicated. Indeed, there are companies that buy pink diamonds as there are some who buy gold, but most of the time, they will buy pink diamonds below their real value.
You can try to sell them to other retailers, but they will probably be difficult negotiators and you will have to beat their supplier either in price or on the rarity of your stone. The last option that is reserved for high-end pieces is to try to sell your diamond through the auction houses.
The diamond auctions organized by Christie and Sotheby bring together many pink diamond investors and collectors. The only concern is that most of the time only unique gems are accepted.
An investment requiring a lot of patience
The more time passes, the more your diamond will appreciate. However, there is little or no chance that the value of the diamond you bought will exceed 30% next year.
You will need to be patient if you want to make a good profit. There is no need to sell fast especially if your stone is a rare piece like diamonds. You will risk selling it even if you think you have made a good deal.
It is important to know when to sell a pink diamond and for that you can get closer to the experts. In addition, consider the diamonds you purchased as a long-term investment. Remember that good things come to those who know how to wait.