They say that you don’t need money to have fun, which may be true but it definitely helps. Money and our finances are a big factor when it comes to deciding the quality of life that we have.
Money affects everything from the healthcare that we receive, to the experiences that we can have, to what we can afford for our children. Therefore, it is important you know that you are protecting your money in the best way possible.
One of the best ways of protecting your fortune is by investing it.
If you just leave your money sitting still in the bank over time it will become worth less and less, this is because banks interest rates are not usually inline with inflation rates.
So, to make this clear, if you put $2000 in your bank account today and save it to get your child a cheap car in 10 years this may seem all when and good. However, the problem is that in 10 years this $2000 will be worth much less and you will more than likely no longer be able to afford a car with it.
For this reason it can be a great idea to invest your money in assets because generally speaking as inflation increases so does the cost of material things so your item should in theory be worth even more than when you bought it.
Investments work so that when the time comes that you need your money you would sell the asset to hopefully gain at least the amount you brought it for if not more. The problem is that there are infinite material things that you can choose to invest in and knowing where to start can be really difficult.
Investment involves a big risk so it is important that you know all of the pros and cons of investing within the specific field that you plan on going into.
When investing it is only natural to want to go for some of the more expensive things as these can hold much more money.
When we think expensive we naturally think of class, glitz, glamour and pretigness and nothing sums all four of these elements up quite as well as diamonds. Diamonds are a growing part of the world of investments.
Could Diamonds Be The Right Form Of Investment For Me?
Only you can decide what type of thing you want to invest in and there are many things to consider when deciding what you want to invest your money into.
One thing to consider is that it can be helpful to invest in a market that you have a lot of knowledge on because this can make the process a lot simpler and help you to make more informed decisions.
Very few people are diamond experts, however being closely informed with any kind of precious stone, any jewelry or any similar product can at least provide some guidance.
Similarly, if you happen to know a diamond expert then you should definitely reach out to them before purchasing any specific diamonds.
If you are not fortunate enough to already know an expert in the field then another good option is to reach out to one online, they may charge you for their services however spending a few extra dollars before each purchase is worth it to save you thousands in the long run.
Another important thing to think about is the form that you would like to purchase your diamonds in. For instance, when people think of diamonds their minds often jump straight to rings.
This is because diamond rings are well known throughout society, they are symbolic across the globe.
Despite the fact that men often give women a diamond ring as a token of their undying love this is usually not the best way to invest as there is not usually that much diamond within a ring and similarly styles change over time so certain diamond rings may become unpopular and therefore lose value leading to a financial loss.
This is unfortunately the same with most diamond jewelry including necklaces and bracelets.
Another way that people are often tempted to buy diamonds for investment purposes is by buying diamond encrusted things such as trinket boxes or rattles; however, once again these things can be quick to lose value.
This is because they do not usually have a lot of diamonds on them and because once again they go out of fashion so may become unpopular and therefore less in demand and less valuable.
So, What Is The Best Way To Invest In Diamonds?
Above are a lot of the wrong ways of purchasing diamonds and this has properly left you questioning what exactly is classed as a good way of investing in diamonds.
If jewelry and diamond encrusted things are a no go then you might be feeling out of options. The honest answer is that buying diamonds on their own is one of the best ways forward.
This is because diamonds themselves are a fairly reliable investment because they are constantly sought after. Unlikely jewelry their value never changes much, of course as with anything they go through their highs and lows but not quite so dramatically.
If buying diamonds is something that you have never done before it can be difficult to know where to start. If this is the case then we would suggest buying from smaller more independent and experienced traders.
This is because bigger more well established stores are often looking to achieve a bigger profit and the staff may not even be experts in the field.
Having said this when buying from traders that you have not previously heard of there is a large element of risk involved as they could easily be ripping you off.
Ways to avoid being ripped off include getting your own valuation done before agreeing to purchase, asking to see their paperwork surrounding the diamond so that you know you are actually buying what you intend to and to get the diamond tested before the sale is complete.
Decisions That You Need To Make When Buying Diamonds
When buying diamonds there are a fair few decisions that need to be made. These decisions include the carat of the diamond, the carat of the diamond is the weight so 1 carat equates to 0.0002 kilograms.
A 1 carat diamond is expected to sell for anywhere between $1300 and $16500. This is a massive prize difference but diamonds of the same weight so clearly there is a lot more to it then simply weight.
One of the other factors to consider is the clarity of the diamond. From lowest clarity to highest clarity the scale goes as follows: I3, I2, I1, SI2, SI1, VS2, VS1, VVS2, VVS1, IF, FL.
You should never really consider buying the lowest three as these are worth very little money. The higher up the scale you go the more your diamond will be worth.
They also come in a variety of colors and with a variety of certificates so it is important to double check these factors too.
Pros And Cons Buying Diamonds As An Investment
Pros
Range Of Costs– One of the best things about using diamonds as a form of investment is the fact that they come in a range of prices. So, whether your looking to invest a hundred or several thousand diamonds could be a great way of investing this money.
Never Lose Much Value– Like any investment there is an element of risk and the diamond market does go up and down however, it is relatively stable so even if you do make a loss it is likely to be minimal.
Cons
They Are A Physical Entity– One of the downsides of investing in diamonds is that they are a physical entity unlike stocks or shares, this leaves you with more risks, for instance they could get lost or stolen. If you were to lose them you would lose the whole investment. However, having a physical investment sometimes makes people feel more in control of the situation.
It Can Be Easy To Be Ripped Off– If you aren’t an expert in the diamond field it can be easy to get ripped off. There are many other, cheaper gemstones that people often use as fake diamonds yet sell as real ones. These stones can include moissanite, white sapphire and zircon. If you were to fall for this you would get back nowhere near what you paid.
You Can Make A Loss– Although as previously mentioned, if you do make a loss on diamonds it isn’t usually a big loss there are still quite frequent dips in the market. These dips are usually around 5% which might not sound too bad but if you have invested $50000 then you would make a loss of $2500. The dip could always be bigger than this too.
Final Thoughts
Diamonds can seem like an exciting investment but it is important that you put a lot of thought into it as there are certain things that need to be taken into consideration.
It is important to remember that diamonds on their own are a safer investment than jewelry or diamond encrusted items.
Similarly, it is important that you try to protect yourself in as many ways as possible such as reading all paperwork and getting private valuations.
Hi, my name is Matt Roberts, and I have been a financial analyst and advisor for the past 7 years.
While my job is based within the money industry, in my spare time I enjoy looking into potential new investment opportunities. From cryptocurrencies, to purchasing vintage cars, everything has the potential to gain you money if you are wise and make the correct investment decisions.
Through this site, I hope to educate others on investing in general, and hope to provide others with useful information that can benefit them and the opportunities they have. If you are not confident with finances, investing money can be a daunting step, however, it is a lot easier than many people are led to believe.
