Diamond is a great investment method considering its high value and great demand. When you buy diamonds as an investment, it is better to buy loose diamonds than diamond jewelry. Loose diamonds will have good resale value and will be devoid of additional costs like the cost of the metal, making charges, etc that jewelry will have.

Even though many people see diamond as a good investment, they often choose the traditional colorless diamonds. But colored diamonds are also a great means of investment. In this article we are dealing with different factors related to choosing colored diamonds as a savings.

Why colored diamonds are a better choice?

Colored diamonds are rare; in fact, among the total amount of diamonds available, there are only 0.01% of natural colored diamonds, which means that, there is only 1 colored diamond in 10,000 diamonds.

Another factor which makes colored diamonds more desirable is the increasing number of celebrities that use colored diamond rings. This has increased the demand and awareness of colored diamonds to a great extent.

How to choose a colored diamond for investment?

The primary concern you should have when buying a colored diamond is your budget. Inside this budget, you can choose to buy either a $25,000 diamond or 5 x $5,000 diamonds. It all depends on your priorities and choices.

 If colored diamonds are split into different levels based on the pricing range, then there will be mainly four groups. The first group is the “Relatively Common Colored Diamonds” which involves grey, brown and fancy yellow diamonds. Next is the “Mid-level Colored Diamonds” that includes vivid and intense yellow diamonds and also some color combinations of orange diamonds. The third group is the “High Priced and Rare Colored Diamonds” including pure orange, purple, green, blue, pink diamonds. The last group is the “Red diamonds” that has a level of their own.

But be aware that this classification is very general. There are a large number of colored diamonds which are made by combining the base colors. Each of these diamonds will be treated differently.

Basic guidelines for investing in colored diamonds

There are some guidelines to ensure the value of the diamonds you buy. You have to be aware of them to get the maximum value for your diamonds.

GIA certificate

Make sure that the diamonds you choose have a GIA certificate. It is the best way to make sure that the diamonds have good quality. When you are selling these diamonds, your buyer would also want see it.

Clarity

Buy a diamond with high clarity grade when you are buying for the purpose of investment. Diamonds with low clarity are hard to sell. So don’t go for a low clarity diamond, even if they are cheaper.

Diamond Cut

The cut of a diamond is responsible for its brilliance and fire. These features will be high for a diamond with a perfect cut; hence its value will be more. So make sure that the diamond you buy is cut properly for it to have maximum shine and also for getting maximum resale value.

Diamond Shape

Diamond shape is a significant factor which decides the value of a diamond. Each diamond shape has its own unique features and value. Whether you buy loose emerald cut diamond or loose cushion cut diamond or diamonds of any other shapes, select one that has high value.

Carat Weight

If you are planning to buy lower-end colored diamonds like the browns or fancy yellows it is better to stay above 1.00 carat. Even in this case, it is sensible to buy diamonds with carat weight next to the classic weight steps. For example, buying a 1.00 carat fancy yellow diamond is better than buying an equivalent 1.30 carat yellow diamond, as there will be a great price difference between them, which accounts to more than 30%. The common carat weights that have more demand are 1.00ct, 1.50ct, 2.00ct, 2.50ct, 3.00ct, 4.00ct and 5.00ct.

But if you consider buying a higher-end diamond like pink, blue, green or purple, it is better to go down in weight till 0.15ct or less. They will be much affordable than those with high carat weights. There are wonderful 0.15ct diamonds like vivid blue or intense pink that has high value that people grabs instantly. If you can afford a little more then it will be great if you buy a diamond above 0.20-0.25ct, even better when it is 0.50ct.

Diamond color

The more strong the color is, higher its value. In the yellow colored diamonds go for the intense yellow diamonds. In light and faint colored diamonds, it is really hard to notice the color, especially when the diamond has delicate colors like green or pink. So such diamonds are less desirable for investment.