Questions about investment-grade diamonds?

Question

I'm completely new to the subject and am just trying to learn more about it. So far I have that alternative investments, including gold and diamonds, are really just for emergencies (e.g., collapse of the financial system) and shouldn't be more than 10% of your portfolio, with no more than 2-3% in diamonds.

So I'm looking at white round brilliant cut stones in the 1.00 to 1.02 carat range, color D, clarity FL, cut grade ideal, excellent symmetry and polish, no fluorescence, no culet, girldle exactly medium faceted, depth percentage 60.1 - 62.8%, table percentage 53 - 57.5.

So far that' all I have. I'm still trying to understand crown angle and pavilion angle, what makes a diamond H&A and if that's worth looking into. Also, how about if symmetry and polish were ideal instead of excellent? Premium ideal cut grade? Is that worth it? Is the table percentage range to broad?

And finally, what would be the liquidity and spread (between and sell) on something like that? Is 30k a reasonable price to pay? Thanks.

? · Accepted Answer

Why would you be buying these ultra-premium diamonds for when the financial system collapses? That's just completely wacky thinking.  If the financial system collapses, it's hard to believe anyone would care about much beyond very basic clarity/color concerns and the size of the rock.  There is no chance that you would get back the premium you paid for the diamond.

You are missing some really basic principles of investing like the liquidity of something is directly proportional to how many people have the ability and the interest in buying something.  There are tons of 1 carat VS1 K  "excellent" cut diamonds sold every year (I would call that a very nice engagement ring stone for normal people).  If you looked at your perfect stone next to one of those you likely couldn't tell the difference.  There are very few perfect stones like you describe sold because the premium  is outrageous and nobody really cares.  In a financial collapse, nobody would care at all and the liquidity would completely evaporate.  Your perfection that cost you a multiple of 7 would be worth nothing.

Anonymous · Answer

Diamonds are an interesting alternative investment I would suggest your check out The Waldman Diamond Company as the offer investment grade diamonds at wholesale prices (Ernst & Young benchmark report). In addition they also offer a resale option...

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Questions about investment-grade diamonds?

2 Answers