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Top 5 tips For New Diamond Investors

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Image by: Jonas

If you’re thinking of entering the diamond investment market, here are a few top tips to get you started. There are plenty of diamond brokers if you are looking for one down under. Australia offers many opportunities for investors.

  1. Know the Basics for Diamond Investing

Before you begin investing in diamonds, diamond brokers suggest that you make sure your intended investment is going to meet these top requirements:

  • Resale liquidity

  • Price transparency

  • Quality certification

  • Market access

  • Expert guidance

You need to buy an investment diamond at a price that is pretty close to the price you can effortlessly resell it at. It’s never a good idea to buy at retail price to resell at a wholesale price. So do find an expert diamond broker who will offer direct access to the international dealer prices as well as the markets.

Also be sure to confirm the quality of your investment stone via a third party or second expert opinion. It’s essential that you establish a good relationship with a reputable and trustworthy diamond investment expert who will advise you about quality, timing, and control and help you to control your transactions.

  1. First Invest in the Basics

Sure, the large, colourful, super fancy diamonds attract the attention of the uber-rich but they’re pretty thinly traded and won’t offer the timely resale or price transparency you want. So unless you are an expert collector, or have a lot of monetary backing, stay away from the rare diamonds. Their pricing is typically extremely speculative and they can be difficult to resell.

Expert diamond brokers in Queensland area or nearby provinces, recommend starting out your investments in Round, 1.01 to 1.49 carat diamonds with IF-VS2 clarity, D-H in colour and cuts that are Excellent to Very Good. These are the types of diamonds that trade daily and their prices are well known, so they are easy to both buy and resell.

Depending on your investment budget, diversification requirements and strategic objectives, your diamond investments could include other sizes like one and a half carat diamond or even two to five carat diamonds.

Typically different investment portfolios use different size diamonds but we suggest you restrict your first time investments to the more well-defined and standardised round investment diamonds that are a “sure thing”.

  1. Quality Certification

You’re going to want to make sure your investment diamonds are graded by the Gemological Institute of America (GIA) and then confirmed by expert diamond brokers.

The GIA is without a doubt the primary grading authority who grade all sorts of diamonds – even substandard poor quality stones. But just because your diamond had a GIA grading report, won’t necessarily mean it’s a good diamond. Your trusted expert will ensure that the diamond meets certain quality standards in addition to you having the GIA grading report.

  1. Expert Advice and International Market Access

One of the most important decisions you will have to make as a diamond investor is who you can trust. Diamonds and the diamond markets are extremely complex.

Set out to establish a relationship with trusted and sophisticated diamond advisors in Australian cities like Sydney or diamond brokers in Queensland who are highly knowledgeable in the nuances of diamond quality along with international diamond markets and the all-important pricing elements. Your investment advisor will ideally have direct access if you want to buy diamonds and they will most likely have inside knowledge of on sale diamond rings in Brisbane and other cities in Australia. and sell trading access to global diamond markets which means you are ensured a fair market value on your bid or asking price.

  1. Transaction Costs and Bid/Ask Spreads

Be sure to consider reasonable investment diamond transaction costs. Even those that involve physical delivery of the stones can run up to the 2 to 5 percent range – dependent on the size of your investment stones. Look for investment diamond opportunities that won’t require the physical delivery of the diamonds at a heft transaction cost.

As an investor it is a good idea to look into the bid/ask spread. That is, the price difference between selling and buying prices for the investment diamonds. When you buy a diamond as an investment, try to find out what you would get if you were to sell the diamond the very same day.

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