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Practical tips on how not to buy a diamond by Joseph Schlussel President of The Diamond Registry In each issue of Jewel, I will share with you some insider information that can be useful to everyone interested in diamonds and other gemstones. This is a fascinating but complex subject, requiring careful observation in order to stay on top of the ever-changing fluctuations in the market. The diamond market, like the gem itself, has many facets. Shifts in national economics and in international politics are reflected as rapidly in the market as a ray of light is reflected in a perfectly cut stone. Yet, through the ages the diamond remains this planet’s most precious and prestigious substance. It is important to remember, however, the price of diamonds is determined by demand, and the consumer has the final word. Because the average American diamond buyer is often young and frequently uninformed about the mysteries of precious stones, I want to share with you, in this first article of the series, some practical tips on how not to buy a diamond. Never buy a diamond because it seems inexpensive. If it’s cheap, there’s a reason. Advertisements, for example, frequently promote diamond earrings for $9.95, indicating they weigh .25 points (there are 100 points to a carat) Remember that what you are being offered in such an advertisement are not stones weighing 25 points or ¼ carat. These are stones weighing ¼ of one point, which is 1/400 of a carat and worth about $2. You can get your money’s worth in both expensive and inexpensive diamonds, but they are all precious and none are cheap. Never buy a diamond because it is advertised as 50 percent off. Many advertisements attempt to sell diamonds for 50 or even 80 percent "off". My response if to ask "50 percent off what?" Never buy a diamond just because it has a certificate. A certificate is a useful tool, but it takes a professional to read and understand it properly. The certificate may well indicate that the diamond is of poor quality, and yet the stone ( to the general public) may seem to be more important simply because it has a certificate. Remember that the certificate is only a report: "It is not a guarantee, valuation or appraisal ..." A certificate has 14 variables and dozens of possible comments, and there are literally millions of possibilities to be considered in the shape, size, location and color of inclusions (flaws), each of which affects the value of the stone. Never by a diamond because it is priced lower than published prices. There are about half a dozen lists giving current diamond prices, but none of them can be completely accurate, including the list I publish. My list for example, quotes the price of a flawless, one-carat stone at $15,000 to $17,000, but this is far from accurate, I have one flawless stone of the best color for sale at $10,000 and another for $20,000. Some other lists try to report prices to the nearest $100, but they are arbitrary at best. Never buy a diamond to because your loved one has fallen in love with it. Of course, beauty is in the eye of the beholder, but the value of a diamond in not determined by sentiment alone, nor in terms of feelings for the giver. Never buy a diamond to help the poor miners in South Africa or in Australia. And never buy a diamond to help the 500,000 diamond cutters in India, Malaysia, Israel or Brazil. Buying a diamond is a straight business transaction. Send charity contributions to charitable organizations. Remember that the origin of a diamond cannot be determined even by the experts. Never buy a diamond based only on the famous 4-C’s (cut, color, clarity and carat weight). You may have seen advertisements or read articles about the 4-C’s, and of course , they are very important. But they are only four of the dozens of variables that determine the value of a diamond. There are also many important commercial considerations, such as the changing fashion in certain cuts and rarity of certain sizes and colors, that must be considered when buying a diamond. So never judge a diamond on the 4-C’s alone. Never buy a diamond over the telephone from a company that has not been around at least ten years. As strange as it may seem, some people do just this! You should buy diamonds only form firms or dealers who have reputations for honesty and fair dealings. Never buy a diamond as a short-term investment. A diamond is like a house—it should be purchased and enjoyed. Of course, when the time comes to sell it, you expect to receive more than the original investment, plus the dividend of having enjoyed it over the years. Unlike cars and furs, diamonds do not depreciate. Remember not to buy a diamond for a quick profit; after all, you must give the seller and the buyer a legitimate profit before you take your appreciation. |
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