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Diamond as investment


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What makes an investment is the ability to buy something, sit on it for a while and then resell it for a profit. You then take your final selling price, subtract the original cost and all holding and transaction costs and what’s left over is your profit. This basic rule holds true for everything from stocks to houses, cars, artwork and any other investment vehicle that you want to consider.


Buying diamonds at good prices is really pretty easy. Go to the ‘find online jeweler link at the top of the page and you’ll find offers for thousands of stones by dozens of different dealers for some seriously competitive prices. There are dealers all over the world who are pining for your money and who can fix you up with a stone or three.


Holding it isn’t such a problem either. Other than insurance costs, there isn’t a lot of carrying expense for diamonds. They aren’t perishable, if you stick with normal types of cuts they aren’t especially trendy and they don’t take up much room.


Oh, and they’re cool. ;)


The problem comes when you sell. Selling is a LOT harder than buying. If you don’t happen to own a jewelry store you’re very likely to find that you have no sales outlet. Ebay is terrible for private sellers. Craigslist is better, but still pretty bad. Pawnshops, resale consignment jewelers, consignment websites, all have their place but all are going to be a considerable bite. Most shoppers find that if they buy a diamond and immediately resell it, they take a hit on the order of 30-70% of the purchase price in the column of ‘transaction costs’. This is about 10-20 years worth of appreciation. It’s worse for the mountings.


I’m a big fan of diamonds. As grim as it sounds, this story is actually better than most of what you buy including clothing, food, cars, electronics, furniture etc. Diamonds last a lifetime and beyond and they represent an investment in your relationship with your beloved that is absolutely worth the money. What they’re not is an investment vehicle. If you’re looking for investment opportunities, talk to your accountant, not your jeweler. Don’t go into a jewelry purchase ever expecting to see your money again.



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You are right on the money, there is no outlet for a regular guy to sell his diamonds today without getting killed by the professionals. Did you ever try to sell a diamond to a retailer? if yes you will know what I mean.

A few weeks ago I had a costumer coming in to my office to buy a new ring for his wife he had his wife’s old engagement ring that he wanted to sell, I told him to go around in the diamond district to see what price he can get for it. He went down to a few stores, the prices he got where far less then half the worth of the stone. A diamond should be bought to be put on your loved ones hand only.

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Tend to agree with all the professionals' opines except in one aspect. If you trade up your diamond, most who allow this will give you full price of what you paid in the transaction. Of course, you aren't actually seeing your money again, in fact you're giving them more for the new piece...and you haven't seen any 'appreciation' in value... ;) but at least the money has made good. One more time.

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