For accomplished investors, diamonds are a solid investment. The returns on these gems are high, and the value of these precious items is rising. Buying and selling of diamonds was a market exclusively entered into by professional. Now, however, private investors from all walks of life are entering into the diamond trade.
Diamond trading is entirely unregulated, so it can be a risky venture for inexperienced investors. There is also a lot of effort involved in getting your diamond professionally graded. However, if you do your homework and manage to access the market, this has the potential to be a very prosperous investment.
Here is how to invest in diamonds:
We will cover two of the main ways you can invest in diamonds; physically own diamonds and invest in a diamond mining company.
You may already own diamonds that are contained in jewelry. If not, you can buy loose diamonds from certain jewelry shops or a diamond trader. If you are interested in buying a loose diamond from a jewelry shop, you may want to drive around to a few in your area and just ask. Often times, they will be more than happy to sell this inventory to a retail buyer instead of shipping it off with the rest of the jewelry scrap that’s destined for wholesale. Unless you are a millionaire, you should just invest in basic diamonds. It is recommended that if you are buying a loose diamonds as an investment that you spend $7,500 and hold on to it for a minimum of five years.
It is important that you look for a reputable merchant that is not going to overcharge you or sell you diamonds of poor quality. Diamonds, unlike gold, are valued depending on their characteristics. No two diamonds are the same. They are graded depending on their cut, clarity, color and carat weight. You will need to have your diamond graded by the Gemological Institute of America and an independent professional.
If you plan to directly own your diamonds, you must make sure that you have adequate security to keep them, and you will need to claim these gems in your home and contents insurance.
Invest in a diamond mining company
Another way to enter the diamond market is to buy shares in a company that is involved in mining for diamonds. With any investment that involves buying shares in a company, there is the risk that the business goes bust and the value of your shares diminish. It is important that you know what you are doing before enter the stock market and that your do plenty of research on the companies you intend to invest in.
If you decide to invest in a mining company, it is better to choose a large company that has many mines. A smaller business with just one mine could be too risky, as if that mine has to close for one reason or another, you could be left out of pocket.
We hope you have found this information useful in finding out how to invest in diamonds. Like with any other investment, before anyone goes near an investment in diamonds, they should do plenty of research to ensure they are making the right decision.