Buying Diamonds: Profit or Loss? What You Need to Know Before Buying!

Is buying diamonds profitable or a loss? This question may seem simple, yet it is one that Jemmia receives from the vast majority of customers. So, do you know which important factors determine the value of a diamond? Let’s explore with Jemmia to find the answer!

A Brief Overview of Diamonds

For a long time, diamonds were considered luxury items, used only as jewelry for the elite such as royalty or the nobility. Therefore, when people mention diamonds, they still assume they are only for jewelry or symbolic items representing extravagance and splendor.

In fact, through the process of formation and development, diamonds have become more common today. They are diverse in design, price, and quality, making them more accessible to many customers, depending on financial ability, preferences, and usage needs.

Is Buying Diamonds Profitable or a Loss?

According to Rapaport – a leading analyst and reporter on the global diamond jewelry market, there are few assets that grow as steadily as diamonds. The growth index of diamonds has remained stable throughout nearly the past two decades.

Over about 40 years, from 1982 to the end of 2021, the Rapaport Diamond Index (RDI) price index for 5-carat diamonds increased by 4.73 times, higher than the 4.11-fold increase in gold prices. Diamond prices also rose by an average of 4.1% per year. Meanwhile, gold’s growth rate was 3.7% over the same period.

The global value of this billion-dollar market is expected to reach more than $138 billion by 2030

According to 2024 statistics, the global value of this billion-dollar market reached USD 94.45 billion. According to analysts, this figure is expected to continue rising and reach more than USD 138 billion by 2030. Clearly, this is a promising market, as shown by these telling numbers.

Mr. Bruce Cleaver, CEO of De Beers – the world’s leading diamond brand, commented: “I cannot find any reason to argue against the medium- and long-term growth of the diamond industry. This is the most positive period I have ever seen in my career.” In the near future, the diamond market will likely become even more vibrant, both globally in general and domestically in particular.

What Should You Know Before Buying Diamonds?

As mentioned above, the diamond market is currently growing strongly and is expected to become even more active in the near future. Especially after going through the tense pandemic period, not only investors but also ordinary people have started tending to buy diamonds as a safe “shelter” for their assets. However, before investing in a high-value item like diamonds, you need to grasp some basic yet extremely important knowledge, as it is related to risk management in investing.

What basic knowledge is needed to avoid buying blood diamonds

As is known, diamond mining must go through a difficult and arduous process. And that is only the step of extracting rough diamonds. To create perfectly sparkling diamonds, they must undergo a meticulous cutting and polishing process by skilled craftsmen. Moreover, due to the impact of the pandemic, diamond mining activities had to stop for a period of time. Meanwhile, growing demand and limited supply caused diamond prices to soar.

Therefore, the market has begun to see places selling blood diamonds, also known as smuggled diamonds. Owning this type of undocumented diamond will cause your jewelry to lose investment value, because they are not considered legally circulated diamonds on the market. So, what basic knowledge should you know to avoid buying blood diamonds? Please continue reading the article.

The 4Cs Factors You Need to Know Before Buying Diamonds

Carat (Weight)

Carat (abbreviated as ct) is the unit of measurement for diamond weight

Carat (abbreviated as ct) is the unit of measurement for diamond weight. 1 carat (1 ct) equals ⅕ gram. Therefore, a 5-carat diamond weighs 1 gram.

Clarity (Purity)

Clarity is the transparency of a diamond, also known as purity

Clarity is the transparency of a diamond, also known as purity. Because the chemical molecule of diamond is carbon, they contain impurities. The fewer impurities a diamond contains, the higher its purity, and the more valuable it is. Clarity is divided into 6 groups with 12 different grades.

Color

The color of a diamond is also called the diamond’s color grade

The color of a diamond is also called the diamond’s color grade. They are divided into 5 color groups including: colorless, near colorless, faint yellow, very light yellow, and light yellow. GIA uses the Latin alphabet to distinguish diamond colors, called the D-Z color scale.

Cut (Cut Quality)

Cut quality directly affects a diamond’s light dispersion

Cut quality directly affects a diamond’s light dispersion. The more perfect the cut, the more brilliant the diamond shines. Cut quality is divided into 5 grades: Excellent (perfect), Very good (very beautiful), Good (beautiful), Fair (fairly good), and Poor (poor)

Conclusion

We hope the article above has helped dear customers find the answer to whether buying diamonds is profitable or a loss. At the same time, it provides core knowledge about the 4Cs factors that you need to know before shopping for or investing in diamonds to avoid buying smuggled diamonds.