I would like to buy a diamond and then resell it for a profit, and wondered if indeed diamonds make a good investment?

It's a good thing you asked about investing in a diamond beforehand because I would strongly advise you NOT to do so! Although you might think that "diamonds are forever" and thus never lose their quality and appeal, investing in diamonds is a bit trickier than it seems. You must keep in mind that when you buy a diamond, preferably a loose diamond if it's for investment purposes (seeing as your jewelry setting really doesn't mean a thing when you come to resell it), you would purchase it at retail prices. Even if you have some sort of discount due to buying several diamonds at once, the price will still be closer to retail than wholesale. So here's where the investment becomes problematic: when you decide to finally resell your diamond to a jeweler or even online, the price you will be offered on it will be on a wholesale scale at best. The difference between retail and wholesale is pretty substantial, and could easily reach 50% of the original price you paid, and hence you could end up losing a few thousand dollars! You will also find it quite difficult to find potential buyers for your diamond. Jewelry stores and jewelers are somewhat wary about purchasing diamonds from a non diamond industry source, like yourself. Try to think in the jeweler's point of view: why would he trust a complete stranger to buy his diamonds from instead of just turning to his regular diamond supplier? To sum it up, although buying a diamond could be pretty straight forward and hassle free, reselling it could be a whole different thing. Not only will it be hard for you to find potential buyers for your diamond, the price you will most likely receive for your diamond will be much less than what you paid to begin with, and most chances are that you won't have any profit whatsoever. Having said all this, I hope you would strongly reconsider purchasing a diamond as an investment as its not really that cut out to be an investment.

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If I were you, I wouldn't invest in diamonds at all, because your best case scenario would be to get a close amount to what you paid for to begin with, or in other words I don't think you'll have much profit in it at all. However, if you still feel persistent on giving diamond investments a try, there are a few things you should keep in mind before you go ahead and purchase your diamonds. First, you're better off buying loose diamonds than diamond mounted on jewelry because that way your diamonds will be more liquid. After all, finding a specific person that is keen on the jewelry setting just like you are could be a bit harder. Regarding the cut, you should only buy round brilliant cut for your loose diamonds because this is simply the most popular and saleable cut in the diamond retail industry. Do not by any means purchase a fancy cut such as heart, marquise or princess cut, which could just be a fad and turn out to be more difficult to sell later on. Also, keep in mind that you should invest in diamonds that are at least 0.75 carats, because anything less than that is just small money. There is a bit of controversy regarding the quality of the diamond you should invest in; some say that you're better off buying excellent diamond D Flawless or VVS quality for your diamond, but others argue you should purchase medium quality diamonds with no visible inclusions instead. Some experts argue that the latter option is more favorable because it is simply more marketable than rarer and more expensive diamonds. Regarding the color of the diamond you should invest in, although fancy colored diamonds such as pink diamonds seem more striking in appearance, you should avoid purchasing these fancy colored diamonds because they will be harder to resell later on. Finally, you must be aware of the fact that when you go to resell your diamonds, people will want to see evidence that your diamond is what you say it is, so be sure to get your loose diamonds certified, preferably by the Gemological Institute of America, which is considered to be most prestigious in terms of standards. Even if you stringently follow the recommendations I've outlined, reselling a diamond could give you lots of grief and if you are not a diamond merchant who already established himself in the diamond industry I strongly advise you to refrain from doing so.

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