Diamond Investment Mistakes

The greatest value of diamonds, condensed in the smallest volume, is a symbol of wealth and love. In recent years, it has become more and more popular among consumers. De Beers, the world’s largest diamond mining company, said that due to the fact that it has been impossible to find large-scale diamond mines in 20 years, coupled with strong Asian demand for diamonds, global diamonds are facing a depletion crisis. Stimulated by production cuts, Ms. Cong Min, an executive director of Xinhui Gold Line, believes that in the next five years, the price of loose diamonds will increase by 5%-10% annually, and the high-quality and large-carat diamonds have a greater potential for appreciation, far exceeding the income of ordinary wealth management products.

As a non-renewable resource, diamonds are new investment “hard currencies” after real estate, stocks, gold and other investment products. Although the investment in diamonds is very rewarding, it is often the case that investors who have never met or have little knowledge of diamonds “misguided” and bought products that did not appreciate at all or did not rise. Cong Min reminds investors to be especially alert to the four most common investment mistakes.

Myth #1: Diamonds Can Appreciate The rapid appreciation of diamonds is a recognized fact, but not all diamonds are appreciating. Take the example of a market-accepted G-color VS1 clarity 1-carat diamond. In December 2007, the international offer was $7,800 per carat. In March 2008, the price of diamonds rose to $8,300 per carat. Within a few months, the unit price of this type of diamond rose by 500 US dollars. However, the price of diamonds below 1 carat did not increase in the sharp increase in international quotes during the same period in March. According to the international quotation of the past three years, in 2007, a diamond with a weight of 30 points fell by 100-200 US dollars per carat, and the 50-minute price quoted by an interdiction of diamonds remained unchanged for three years. Then the devaluation of the dollar and other factors were considered. The actual price is falling.

The price rise and fall have a watershed of 1 carat. Therefore, as a diamond for investment purposes, it is usually necessary to choose a space above 1 carat to maintain value. Except for colored diamonds, because of the rareness of colored diamonds, there is no “divergence” in the price of 1 carat for colored diamonds, and the investment function of colored diamonds is even more prominent. Generally, colored diamonds also have higher weight and better color.

Myth #2: As long as diamonds are big, although generally speaking, diamonds are as big as possible, but in fact, the value of diamonds does not depend entirely on the weight of the diamonds. The color, clarity and cut of diamonds are all important. For white diamonds, color and clarity are the natural characteristics of diamonds, which cannot be changed. Cuts are artificially controlled. An excellent cutter can maximize the value of a diamond. Therefore, for a total price of a diamond, the weight factor can account for 40%. In addition, the color accounted for 20%, the cut 20%, and the 20% clarity, that is, the 4C factor is very important.

Myth #3: Diamonds are the largest producer of diamonds in South Africa. The largest producer of diamonds in the world is South Africa, but buying diamonds is not the cheapest in South Africa. As the world's largest diamond cutting and processing country, Antwerp, Belgium is the largest transaction for polished diamonds. The market, that is to say, more than 90% of the diamonds produced in the world are sent to Belgium for processing before they can be sold anywhere in the world.

So, is it the cheapest to buy diamonds in Antwerp? This problem is not entirely correct. Because diamonds are imported as raw materials, current imports of diamonds into China are zero tariffs. Therefore, the difference between buying bare diamonds in China and buying diamonds in Belgium is not significant. There is only one additional transportation cost.

Myth #4: Flower-type diamonds have more room for appreciation than round diamonds Many investors believe that the price appreciation of flower-shaped diamonds will be larger than that of ordinary round diamonds. However, experts pointed out that unless the foreign flower type diamonds are very meticulously carved, such as the diamond carving of diamonds and other high-tech flower-shaped diamonds, indeed investment value, from the data point of view, heart-shaped, square and other flower-shaped diamond appreciation Space is lower than round diamonds.

Ms. Cong Min finally said that the people who buy diamonds for investment use should bear in mind the above-mentioned susceptibility to errors. For diamond accessories that are used for ordinary purposes, they can be flexibly selected according to their spending power and preferences.