Estate diamonds – are they a good investment?

There is a conflict of opinion when it comes to the question of whether diamonds make a good investment or not. Some experts say yes, that diamonds are a commodity that's always in demand and that since diamonds are constant and consistent in their quality, they retain their value. Others explain that diamonds are not necessarily a good investment since the diamond market can be volatile. The value of diamonds is, in part, due to their rarity. If the diamond market was suddenly flooded with products then diamonds would decline in value and you may not be able to get back your investment. When it comes to estate diamonds, the question becomes even more complex. Not only do you have to factor in the fluctuating diamond market but you must also take the diamond's characteristics and its history into consideration. Though it is generally true that antique diamonds are now considered retro, hip and trendy, their popularity may always decline, in which case the diamond's quality will be the main determinant in terms of its value. Generally speaking, the higher the quality of the diamond (the higher its 4 C's are) the more valuable it'll be. A diamond with an excellent cut, flawless clarity, good color and high carat weight will be worth quite a lot. With antique diamonds, the cut of the diamond is especially important in determining the precious gemstone's value. Diamonds from a certain time period were antique cut. Antique cut diamonds were fashioned to maximize their size (carat weight) while modern cut diamonds were shaped to enhance their natural brilliance. As such, antique cut diamonds have a smaller table, a thicker girdle and a narrow, elongated pavilion, which gives the precious gemstone the illusion of being larger than it actually is. Antique cut diamonds are no longer in fashion. That particular type of cut is considered to be outdated and rather wasteful (by attempting to enhance the diamond's size, jewelers ironically cut off a large percentage of the diamond's rough material). Also, modern jewelry designs do not usually allow for the use of antique cut diamonds. Modern settings are designed to house modern cut diamonds, and cannot properly accommodate an antique cut diamond (which is longer and narrower than a modern cut diamond). As such, if you were considering purchasing loose estate diamonds and later selling them off to be set into modern pieces, you may have a problem finding a buyer.

If the estate diamonds you were planning on buying are of good quality and if they are not antique cut then yes, they could end up being a good investment. Estate diamonds often have a colorful and interesting history. If you can find out the diamonds' previous owners and if they are of any interest, the diamonds could be very valuable to an antique collector. Ask to see the diamonds' letters of origin, which list the diamonds' previous owners.



Last but definitely not least, the estate diamonds you buy should come equipped with a GIA or AGS approved certificate of authentication. If the diamonds do not have an attached certificate then I highly recommend against buying the diamonds. If, for some reason, you are sure of the diamonds' authenticity and their quality then you could always have them certified at a later date. And don't forget to insure your precious and valuable diamonds against possible loss, theft or damage.

• 0
• 0