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What Are the Best Tips for Investing in Diamonds?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 06 September 2016
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The main purpose for embarking on any investment project is to gain appreciable dividends on such investments, which also applies to investing in diamonds. For those who wish to invest in diamonds but are uncertain as how to go about the process, specific tips can help them decide how best to approach the subject of investing in diamonds. Some issues to consider when contemplating investing in diamonds are the capital base of the investor, an appraisal of the attributes for any diamonds, and an assessment of the market for diamonds.

When the decision has been made about investing in diamonds, the first step would be to conduct an analysis of the diamond trade, including the current prices for the different types of diamonds, which may be differentiated along the lines of color, size, cut and purity. This is important because the various colors of diamonds have differing prices, such as white, blue, pink and all the shades in between, including yellow. The prospective investor would have to check his or her capital base in order to find out how much money he or she has to work with, as this will help determine what type of diamonds to purchase. After this determination, the investor would have to look for where to purchase the diamonds at a reasonable rate.

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Some dealers are able to sell diamonds at a rate that is comparatively cheaper than what others may offer for the same category of diamonds. In order to ensure that the diamonds are of stated qualities, the investor should inspect the diamonds in order to check for the cut of the stones and other attributes that may affect the price of the diamonds, such as any defects in the stone. The reason why the cut of the diamond should matter to an investor is due to the fact that the diamond prices may be affected by the particular type of cut that is considered fashionable at that particular time. As such, a cut that is fashionable now may not be in fashion in about 15 years when the investor decides to resell the diamond for profit, meaning that the eventual price may be negatively affected.

Another factor to consider when investing in diamonds is the color of the diamonds, because colored ones are rarer and consequently more expensive than the more ubiquitous white ones. Investing in diamonds also means that the investor must understand that it is often an easier process when he or she is trying to purchase diamonds than it is to resell them due to the apprehension of dealers when bargaining with unknown sellers. Generally, the price of diamonds are relatively more stable than other types of investments, because that the law of demand and supply is more artificial in this trade based on the fact that only a few major corporations control the majority of diamond sales around the world.

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