3 Biggest Mistakes you can Make When Buying Diamonds as an Investment

3 Biggest Mistakes you can Make When Buying Diamonds as an Investment
  1. Paying too much

The greatest thing one thinks about when making an investment is that they will buy something of a lesser amount and sell it at a higher price. However when you plan on investing in diamonds this can be quite difficult, as it is not easy to buy a diamond stone at a cheap rate. First of all there will always be a tax included, unless you buy the diamond from a place that does not include value added tax (VAT). The VAT included will mean that there is already a 20% loss on the investment that you make. Therefore, to overcome this 20% loss, the diamond you buy would have to increase in its value.

Moreover, there is a retailer mark up included in your purchase. The mark up can vary from store to store due to the increase in competition that is why it is important to make sure you check out various stores so that you do not get a higher price. There are also hidden costs of the stone, for instance the price of the setting. If your diamond is of a high value, then it is best to get it insured which can cost you even more.

  1. Expecting too much

If you think that investing in a diamond is the fastest way to make some money then you are completely mistaken. Diamonds take a lot of time to increase in its value. Like any other commodity the value of diamonds can increase as well as decrease at any given time. There is no possible way to make a profit on buying a diamond in the short term; the only way you could get a value back is after five years or so.

  1. Buying the wrong kind of diamond

The biggest problem one can face when buying a diamond is buying the wrong kind of diamond. Some kinds of diamonds are easier to resell a faster rate making it easier for the buyer to get a return on their investment. The most important thing to remember when buying a diamond is to make sure that it is certified. A certified diamond can be sold much easily as compared to one that is not. The shape is also an important factor; round shaped diamonds are more valuable so it is better to invest in them.

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