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A Toppest Quality Diamond Or 3 Decent Quality Diamond?


luke
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There is always a third option: don't buy a diamond.

 

The point Neil is making is serious: diamonds are very poor investment vehicles because of very high transaction costs and limited liquidity. This is valid at pretty much all levels of price except the very highest (multi-million $), where transaction costs remain high but not monstrous as a % of price, however liquidity is very very limited.

 

If you are buying things for collection purposes, I'd rather have three different looking stones than three fundamentally identical ones - presumably the purpose of the collection is aesthetic appreciation. For example, I'd get a white (F-G/VS2)round, a white (F-G/VS1) step cut and a Fancy Intense or Fancy Vivid Yellow - three 1 carat stones with the above characteristics can be bought for $40k overall.

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There is always a third option: don't buy a diamond.

 

The point Neil is making is serious: diamonds are very poor investment vehicles because of very high transaction costs and limited liquidity. This is valid at pretty much all levels of price except the very highest (multi-million $), where transaction costs remain high but not monstrous as a % of price, however liquidity is very very limited.

 

If you are buying things for collection purposes, I'd rather have three different looking stones than three fundamentally identical ones - presumably the purpose of the collection is aesthetic appreciation. For example, I'd get a white (F-G/VS2)round, a white (F-G/VS1) step cut and a Fancy Intense or Fancy Vivid Yellow - three 1 carat stones with the above characteristics can be bought for $40k overall.

Thanks.

I am going to go to overseas, and I can get a 10% gst return on a loose diamond, that's why I thought it might be a good chance to buy a loose diamond...

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Um - bear in mind that the GST return means you have paid the tax in the first place, so it's not necessarily a bargain. Also, US loose diamond prices are usually among the lowest in the world net of all taxes, and buying something abroad means limited (and potentially expensive) recourse if anything goes wrong.

 

Enjoy your travels!

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Um - bear in mind that the GST return means you have paid the tax in the first place, so it's not necessarily a bargain. Also, US loose diamond prices are usually among the lowest in the world net of all taxes, and buying something abroad means limited (and potentially expensive) recourse if anything goes wrong.

 

Enjoy your travels!

 

Alright, Thanks for your advice.

By the way, I am in Australia, the tax is 10% here, and currently the AUD is high 1.07...

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The probelm with investing in diamonds is in selling them, not buying them. Transaction costs can be as high as 50% or more. It takes a LOT of appreication to make up for that. If your plan is to sell overseas it's even worse because you are unfamiliar with the local market in the destination country. You don't know if you're getting a deal or if you're getting stung and usually there's serious time pressure becasue you need to go home again.

 

As a general rule, diamonds in Australia are expensive precisely because of the taxes but you own the same taxes if you import them yourself. There's also some savings overseas because of the more efficient distribution system in the US and elsewhere but it's simply not an investment opportunity.

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The probelm with investing in diamonds is in selling them, not buying them. Transaction costs can be as high as 50% or more. It takes a LOT of appreication to make up for that. If your plan is to sell overseas it's even worse because you are unfamiliar with the local market in the destination country. You don't know if you're getting a deal or if you're getting stung and usually there's serious time pressure becasue you need to go home again.

 

As a general rule, diamonds in Australia are expensive precisely because of the taxes but you own the same taxes if you import them yourself. There's also some savings overseas because of the more efficient distribution system in the US and elsewhere but it's simply not an investment opportunity.

Acually The city I am flying to is Shanghai China. I lived there for 17 year, so I am very familier with that city. the diamond price is about 20-30% higher than Australia. after the gst return, it could be 30-40%. But, to sell a diamond is a big problem, people rarely buy diamond from a stranger. Alright, I give up. Thank you all! My Friends!

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