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Buying jewellery can sometimes be a good investment if you can buy something that will hold it’s value.

Diamonds have been a classic investment piece, but are they still worth buying? In 2017, the Pink Star became the most expensive diamond ever sold, at the whopping price of $71million. However, diamonds don’t have to be for millionaires. Investing in precious stones can make your savings worthwhile, though investors should be careful.

Diamonds are a big area for alternative investments. Wine and art have been the most popular investment pieces, but diamonds are fast catching up, as articles like ‘Which Country Deals With Diamonds?’ show. Unlike art and wine, diamonds are portable and using them does not reduce their value, meaning they can be given as gifts, bought as a couple, and enjoyed. 

Which colour is the most valuable?

Many people know about the traditional white diamonds, but coloured diamonds are becoming very popular with collectors and experts. Impurities in the rocks in some instances lead to a gleaming stone that is coloured being created. The higher price is based on the rarity of these stones. 

Roughly one carat of white diamond is produced for every ton of rock that is mined. For coloured diamonds, the production rate is much lower and is around 0.1 per cent of the rate of white stones.

The rarest diamonds are red. Experts aren’t sure what causes this red colour to occur on the stone. The next most valuable are blue diamonds, which are caused by boron in the rock. Pink diamonds are created by distortions in the stone’s structure, yellow is caused by nitrogen being present, and green happens when there is radiation. 

Despite this rarity, there are dangers for investors. Diamonds are not a store of value, but they have outperformed the stock market in recent years. 

What are the risks?

Despite this performance, there are many stories of people investing their life savings, only to later discover they’ve bought worthless crystals. As an investor, you must do your research and only deal with a reputable company. 

Learn about the five Cs of diamonds; carat, cut, colour, clarity, and certificate. A certificate is essential for investors. A certificate from an accredited, intentionally recognised body means that a diamond has been independently assessed for authenticity and graded according to its quality. 

Any diamond purchase must be accompanied by a certificate, and should not be one that is written in-house by the jeweller or the dealer. 

Check the stone for a laser inscription, which should correspond to the certificate. This should be checked by an independent third party. 

The other four C’s differ in importance depending on whether you are buying white or coloured stones. Clarity is the purity of the stone, so this is less important in coloured stones. Carat is the size of the diamond, which will make a big difference in the price of coloured stores in particular. The intensity of the colour is also very important for coloured diamonds.