Diamonds: Profit or Loss? Know Before You Buy!

Buying diamonds: profit or loss? This seemingly simple question is one Jemmia receives from the vast majority of customers. So, do you know the important factors that determine the value of a diamond? Let's find out with Jemmia to get the answer!

A Little About Diamonds

For a long time, diamonds were considered luxury items, only used as jewelry for the upper class such as royalty or nobility. Therefore, when mentioning diamonds, people still assume they are only for jewelry, or symbols of luxury and splendor.

In reality, through the process of formation and development, diamonds have become more popular today. They are diverse in designs, prices, and quality, making them more accessible to more customers, depending on their financial ability, preferences, and usage needs.

Buying Diamonds: Profit or Loss?

According to Rapaport – a leading global analyst and reporter on the diamond jewelry market – few assets grow as steadily as diamonds. The growth rate of diamonds has been stable for nearly two decades.

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

The global value of this billion-dollar market is projected to reach over 138 billion USD by 2030

According to statistics from 2024, the global value of this billion-dollar market reached 94.45 billion USD. According to analysts, this figure is expected to continue to increase and reach over 138 billion USD by 2030. It can be seen that this is a potential market with these telling numbers.

Bruce Cleaver, CEO of De Beers – a leading diamond brand worldwide, commented: “I don't see any reason against the medium and long-term growth of the diamond industry. This is the most positive period I've ever seen in my career.” In the coming time, the diamond market will likely become more vibrant, both globally and domestically.

What Must You Know Before Buying Diamonds?

As mentioned above, the diamond market is currently developing strongly and is expected to become even more bustling in the near future. Especially after going through a stressful pandemic period, not only investors but also the public have started to tend to buy diamonds as a safe "shelter" for their assets. However, before investing in high-value items like diamonds, you need to grasp some basic but extremely important knowledge. Because it relates to risk management when investing.

What basic knowledge is needed to avoid buying conflict diamonds?

As known, diamond mining is a difficult and arduous process. That's just the mining of rough diamonds. To create perfectly sparkling diamonds, they need to be meticulously cut and polished by skilled artisans. Moreover, due to the impact of the pandemic, diamond mining activities had to be halted for a period. Meanwhile, increasing demand and limited supply have caused diamond prices to skyrocket.

Therefore, the market has started to see places selling conflict diamonds, also known as smuggled diamonds. Owning this type of diamond without proper documentation will devalue your jewelry as an investment. Because they are not considered legally circulated diamonds in the market. So, what basic knowledge do you need to avoid buying conflict 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 weight for diamonds

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

Clarity

Clarity is the clarity of a diamond, also known as its purity

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

Color

The color of a diamond is also called its "water"

The color of a diamond is also called its "water." 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 the diamond's dispersion

Cut quality directly affects the diamond's dispersion. The more perfect the cut, the more brilliant the diamond. Cut quality is divided into 5 grades: Excellent, Very good, Good, Fair, and Poor.

Conclusion

We hope the above article has helped you answer the question of 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.