How to Invest in Diamonds
Valentine's Day is quickly approaching. Lovers and loved ones may be considering the purchase of a diamond for their beloved. In fact, $3.0 billion was spent on jewellery and watches at retailers in Canada during 2008 according to Statistics Canada.
An interesting article on "How to Buy a Diamond Ring without Getting Duped" by Duncan Hood appeared in a MoneySense Magazine issue dated February/March 2007. The article offers excellent advice on what to look for before going to a jewelry store from Antoinette Matlins, an internationally recognized diamond expert in Woodstock, Vermont.
Antoinette Matlins has seen the worst case scenarios in relation to diamonds:
- forged or inaccurate reports attesting to a diamond's quality
- diamonds that are sometimes heated to thousands of degrees under tremendous pressure, which improves their colour but can make them more likely to chip
- fractures filled with a glass-like material
- laboratory-produced diamonds of such high quality that it is difficult to tell them apart from natural diamonds with the naked eye
To avoid the above-mentioned worst case scenarios, Antoinette Matlins recommends that you become familiar with the 4 C's before buying; i.e. cut, colour, clarity, and carat. These four factors determine the worth of a diamond.
Cut – is the most important factor. Ask for a certificate from the Gemological Institute of America (GIA) grading the cut as 'excellent' or 'very good'. Do not go below 'good'. The cut is "what gives a diamond its liveliness, sparkle, and fire".
Colour– is graded by a letter from D to Z. The best grade is D and means the diamond is completely colourless. As they go down the scale, diamonds are more yellowish and brownish. According to Matlins, the highest grades are very close together. There is no need to pay more for an D grade if a diamond with an F grade appears the same to you.
Clarity– refers to the number of tiny black or white specks as well as any other small flaws in the diamond. The top grade is FL (Flawless) followed by IF, VVS1, VVS2, VS1, VS2, SI1, SI2, and I1. Antoinette Matlins again advises that "you can'trust your eyes on this one". An IF stone can be much more expensive than an identical SI1stone. She concludes "there is little sense in paying for the upgrade". She continues, "the clarity grade has nothing to do with the sparkle… so this is the place to get a lot of leverage on your budget".
Carat– is the weight of the diamond. If more carats, the diamond will be bigger and more expensive. The price increases at each whole number. Matlins advises that you can save money by buying a 0.95 carat diamond instead of a 1 carat stone. However, Matlins warns this may not be "a good place to go cheap. Your beloved may tell you that size doesn't matter – but it does".
When shopping, compare and price similar diamonds based on the 4 C's. Even reputable jewelers can be fooled. Matlins advices that you buy diamonds loose from a jeweler who agrees to put the 4 C's in writing on the receipt. The jeweler should also be willing to refund your money if a third party appraiser gives the diamond different grades.
After purchase, take the diamond to an independent gemologist appraiser; i.e. one that does not sell diamonds. Certified appraisers can be found through the American Gem Society (Click HERE) and the American Society of Appraisers (Click HERE). Both organizations have members in Canada.
If your appraisal agrees with what is written on the jeweler's receipt, you can now have the diamond set. If the appraisal is different, Antoinette Matlins advices that you return the diamond for a refund and shop elsewhere.
For more information on purchasing diamonds or precious gemstones, check out the following titles at the Toronto Public Library:
Cuellar, Fred. How to Buy a Diamond : Insider Secrets for Getting Your Money's Worth. 6th ed. Naperville, Ill. : Sourcebooks Casablanca, c2008. Click HERE for details.
Matlins, Antoinette Leonard. Diamonds : The Antoinette Matlins Buying Guide : How to Select, Buy, Care for & Enjoy Diamonds with Confidence and Knowledge. 2nd Ed. Woodstock, VT: GemStone Press, c2006. Click HERE for details.
Matlins, Antoinette Leonard. Jewelry & Gems, the Buying Guide : How to Buy Diamonds, Pearls, Colored Gemstones, Gold & Jewelry with Confidence and Knowledge. 6th Ed. Woodstock, VT: GemStone Press, c2005. Click HERE for details.
Molofsky, Randi. A Girl's Guide to Buying Diamonds : How to Choose, Evaluate, and Negotiate the Diamond You Want. Gloucester, MA : Quarry Books, c2005. Click HERE for details.
Newman, Renée. Diamond ring Buying Guide : How to Evaluate, Identify and Select Diamonds & Diamond Jewelry. 7th Ed. Los Angeles, Calif.: International Jewelry Publications, 2008. Click HERE for details.
For more information, search the Toronto Public Library catalogue (click HERE) with the following subject headings:
Diamonds
Diamonds – Purchasing
Gems
Gems – Purchasing
Jewelry
Jewelry – Purchasing
Precious stones
Precious stones – Purchasing
In a future blog, advice will be given on purchasing Canadian diamonds as well as how to avoid purchasing "blood diamonds"; i.e diamonds mined in a war zone and sold to finance an insurgency, invading army's war efforts, or a warlord's activity.
One thought on “How to Invest in Diamonds”
Valentine’s Day is that time of the year when people get to be romantic and express their affection in either the simplest or most extravagant way. What better way to show it than getting her a diamond ring, which is a woman’s best friend, and propose? It is worth noting that you may not master all the 4C’s in just a glance. It would be better if you do your research about who provides the best in quality and affordability.