Can precious stones really hold a candle to coins and precious metal bars as investment alternatives? Diamonds are fascinating products of nature and are being discovered by more and more precious metal investors. Synthetic diamonds are also sold, but the gemstones are only really valuable if they were created by natural chance. If the cut, color, clarity and carat number are also right, a gemstone is a real alternative to gold and silver for some investors.
At first glance, precious stones have nothing more in common with precious metals than the first syllable. Nevertheless, they should not be forgotten when taking a comprehensive look at the market for precious raw materials, after all, similar techniques are used in the extraction of precious stones, and precious stones have a similar meaning to the jewelry industry as gold and silver – for some, the gold chain with a sparkling Diamonds are really beautiful and valuable.
Diamonds, rubies, sapphires and emeralds as investments
So it is not surprising that diamonds are also suitable as an investment. Four properties play a role in their evaluation: the weight (measured in carats), the color, the purity and the cut. On the other hand, the origin of the gemstone plays a subordinate role. The ruby, sapphire and emerald are considered particularly rare. The valuation of a stone is a practically impossible undertaking for laypeople, as even small imperfections can cause price differences in the five-digit range in extreme cases. In addition, there are many well-made fakes that are usually recognized immediately by experts, but can easily slip through to a layperson.
Precious stones as an investment: does it pay off for normal investors to invest in diamonds, sapphires, rubies, emeralds and other precious stones?
Investing in Gemstones: Short-term gains unlikely
Buying a gemstone should normally not be an option for the average consumer for investment purposes. The vast majority of the stones offered are not suitable for long-term investment and are of little interest to jewelry manufacturers. In addition, there are no short-term profits to be made with gemstones because of the fixed trading costs. And the typical motivation for buying gold and silver – protection against inflation and recession – does not fit in with buying a gem, because in a recession, the demand for luxury items is likely to collapse.
Anyone who nevertheless wants to invest part of their assets in gemstones is well advised if they do not invest too large amounts in a single stone – stones that can also be processed by the medium-sized jewelry industry are particularly easy to sell. All too sensational rarities, which can only be sold through international auction houses, can easily plummet in value if no enthusiast can be found.
Carat, Color, Clarity and Cut: Selection criteria for diamonds
Coin collectors pay attention to the surface of their treasures, postage stamp lovers take a close look at the points – but how do experts decide on the quality of a diamond? The most important criteria can be summarized in a simple formula: Four terms, all of which begin with the letter “c”, represent the most important points of reference. Carat, Color, Clarity and Cut are the measure of all things on the diamond market. They provide information about how expensive a diamond really is:
Cut diamonds are natural products. People only intervene when the diamond is cut – because it is the cut that creates the shine and shine with which diamonds have become the epitome of wealth and prosperity. The cut is an art in itself, correct proportions and the arrangement of the facets determine the appearance of the diamond. A distinction is made between four quality levels between “very good” and “poor”.
Color The diamond is actually referred to as a colorless stone – but if you look into the window of a jeweler, you will discover practically all the colors of the rainbow. In fact, very fine white is extremely rare, as is diamonds with a pure color. Yellow gemstones are particularly common. Today there are a total of eleven color classes.
Clarity No impurities are tolerated in a valuable gemstone. It is completely normal that a diamond, as a natural product, also contains inclusions of non-crystallized carbon. Nevertheless, it is true that the purity of a diamond also determines its value and the diamond becomes more valuable with increasing purity. The purity is assessed in six stages.
Carat This unit determines the weight and therefore also the size of a diamond. One metric carat is exactly 0.2 grams or 100 points. The price of a diamond is calculated using the number of carats.
