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Coloured diamonds – How to invest

Coloured diamonds are one of the most rare and beautiful gemstones on the planet. Of all the diamonds that are unearthed each year, only one in every ten thousand is an investment grade coloured diamond. Unlike other precious commodities such as gold and silver however, diamonds are notoriously hard to value and there are several factors that investors should take into account before deciding on whether to invest. To help you understand the basics, we’ve put together a simple guide on how to invest in these rare and precious gemstones.

Understanding the four C’s

All diamonds are graded based on the four c’s; colour, cut, clarity and carat weight. When it comes to valuing coloured stones, colour is a much more important factor to take into account than if you were grading a colourless stone, however all of the four c’s need to be considered. Typically, when grading a coloured diamond, a high clarity diamond, (one with very few visible flaws) and a high intensity, vivid coloured stone will be worth much more than a low clarity diamond with a duller hue. The size of the stone (Carat weight) and the desirability of the cut are also important factors

Which colours are considered the rarest?

The most common colours of diamond are black, brown and yellow. These are considered entry level stones are generally much cheaper than other coloured stones. Yellow diamonds that have a particularly intense, or vivid colour are highly sought after however, and can sometimes fetch prices on a par with much rarer coloured diamonds such as green or blue stones.

Mid to high price range stones include high quality yellow and orange stones, whilst the rarest coloured stones are green pink and blue. These are considered particularly rare and desirable stones in these colours can fetch prices upwards of £100,000. Fancy vivid red diamonds are the rarest diamonds of all, and only a handful of investment grade fancy vivid stones have ever been seen at public auction.

Certification

When investing in coloured diamonds, you should always make sure that any stones you purchase have been graded by a recognized diamond grading authority such as the GIA, EGL or AGS. This way you can be sure your diamond is the genuine article and exactly as specified. It is also important to acknowledge the differences between grading authorities as each authority has their own criteria for grading and two diamonds that are graded the same by two different authorities may not necessarily be the same quality.

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