Natural color diamonds and rare gemstones have sold at record prices during the past few years on the international auction market proving that they can be an extraordinary treasure for both adornment and as an investment. John King, chief quality officer of the Gemological Institute of America (GIA), explains basic investment strategies for these coveted stones as well as classic gems and diamonds.
Not only are gemstones a romantic gift, but they have enormous investment potential. What are the basics when picking out significant stones?
Certainly, the 4Cs (carat, clarity, color, cut) are very important in determining the value of the stone and the investment quality. But there is one important distinction between gemstones and diamonds, and that is color. For diamonds, you look for the absence of color, while for color gems, you want the most saturated hue possible. Regardless, it is rare to come across large diamonds or gemstones that are completely clean of all inclusions. If you’re buying a color gem, definitely research your options to find out if inclusions are common or if the country of origin makes a difference in the value.
How do fancy color diamonds differ from these other gems?
Like color gemstones, the stronger, purer colors are the rarest and therefore the most valuable. Interestingly, diamonds probably occur in more colors than any other gem because of the range of subtle tints and hues. Green, red and blue diamonds are exceedingly rare, while yellow and brown are more common, relatively speaking. But beware: you need to know whether the color occurred naturally or has been lab-altered, because natural color diamonds are traded at a higher price. This distinction can be difficult to analyze, and GIA excels at uncovering these nuances.
With so many varieties of certificates out there, why is GIA’s the most widely accepted and why is this important for resale?
GIA has taken a leadership role in the jewelry industry ever since it invented and standardized the way that diamonds are graded. We have a fundamental commitment to transparency that gives the consumer confidence in what we do, especially because we are a truly independent organization not tied to any diamond sellers.
What are the best ways to protect your investment from the start?
We always recommend that buyers do their homework and understand what they are investing in. A great place to start is www.4cs.gia.edu, our educational site that contains a wealth of information for the novice or the more informed jewelry buyer. Second, find a GIA – trained jeweler who is in good standing with industry organizations. Third, invest in insurance. Most of the established insurance agencies will expect an independent, objective report from a reputable organization like GIA to help them determine value. Lastly, consider having your diamond laser inscribed with your GIA report number. This inscription is not visible to the naked eye and has no effect on the value of the diamond, but it can help protect you from theft or loss.
