A rock stable funding is difficult to return by throughout these unsure instances – however a diamond is a glowing possibility that you simply may contemplate. 

Over the previous 12 months, the common worth for this treasured stone has risen by 6.4 per cent whereas over 5 years it’s up 6 per cent, in line with the trade’s Diamond Costs Index. 

However among the highest high quality diamonds have seen costs rise by greater than a 3rd in a yr and are up virtually 60 per cent in 5 years. 

Set in stone: A few of the highest high quality diamonds have seen costs rise by greater than a 3rd in a yr and are up virtually 60 per cent in 5 years

Such returns put most shares and shares to disgrace. Over 12 months the FTSE All-Share Index is down by about 2 per cent whereas over 5 years it has risen by 1 per cent. 

At all times search out skilled steering 

Diamond dealer Tobias Kormind, co-founder of on-line jewelry dealer 77 Diamonds, warns that though thrilling, the diamond market is unregulated and fraught with risks, so skilled steering is important. 

He says: ‘Few of us have any thought of the true worth of a gem at first sight – whether or not it’s both a nugatory trinket or a priceless heirloom.’ 

He provides: ‘Whereas it’s key to hunt recommendation when shopping for and promoting, you need to nonetheless watch out as shoppers get exploited, overcharged or paid too little for a treasured stone of their possession.’ 

Kormind believes anybody fascinated with buying and selling gems wants to talk to a member of the Nationwide Affiliation of Jewellers, which has a code of conduct ‘primarily based on honesty, integrity and professionalism’. 

But he warns that prime road retailers may attempt to promote diamonds at retail somewhat than wholesale costs – consuming into the potential for future earnings. 

He provides: ‘As a person you need to be conscious there’s VAT to pay on diamond shopping for, which you’ll not recoup when promoting until you might be VAT-registered. This implies stones must rise in worth by at the very least 20 per cent so that you can make a revenue on them.’ 

There’s additionally a minimal 10 per cent capital beneficial properties tax to pay on any earnings made on stones price greater than £6,000 offered above a £12,300 annual exemption restrict. 

Research the ‘4 Cs’ to gauge high quality 

Gem values are primarily based on the ‘4 Cs’ – carat, color, lower and readability. 

Carat is the measure of a gemstone’s weight with one carat being 200 milligrams. The larger the stone, the extra worthwhile it often is. However a one-carat diamond will be price something between £1,000 and £20,000 or extra, relying on its color, lower and readability. 

For a diamond, the extra ‘glowing white’ it’s, the upper the worth it is going to command. Yellow tinges tends to cheapen it. If you happen to go for a rock with a slight pink hue you could pay excess of for a white diamond, as a result of their costs have been hovering lately as they’ve change into modern.

Kormind says: ‘The Argyle diamond mine in Australia is famend for pink diamonds, however closed a few years in the past inflicting a fall in provide. Prior to now 5 years, some pink diamonds have greater than tripled in worth.’ 

He provides: ‘After all, this doesn’t imply costs will proceed to rocket, however it exhibits how values can rise unexpectedly.’ 

The lower is how a craftsman has chipped away on the stone to make it sparkle – so is one other important consideration. 

The readability appears to be like for imperfections and until you might be an skilled wanting by a ‘loupe’ magnifying glass, a minor blemish is prone to be missed.

Think about how the stone could possibly be a liquid asset 

Gems must be seen as a long-term funding – usually held for 5 years or extra. You’re often higher off shopping for a smaller top of the range diamond – resembling a one-carat stone price greater than £5,000. 

These are termed a ‘liquid asset’ within the gemstone world as a result of they are typically extra tradeable than a bigger rock of three carats or extra. Fee on gross sales by a dealer work out at about 5 per cent of the worth.

Demand a certificates of authenticity 

Valuing gems with an untrained eye is extraordinarily onerous, however you may get proof of high quality by knowledgeable certificates. 

Probably the most revered is the worldwide Gemological Institute of America (GIA) certificates. That is successfully a report card on the standard of a diamond and allows you to examine it with different stones. Thomas Schrock is founding father of on-line dealer The Pure Gem. He says: ‘If a stone has a certificates, it ought to imply it has been analysed by a trusted laboratory.’ 

There are different certificates, together with the Ceylon Gem Lab (CGL) certificates issued in Sri Lanka; the Gemmological Laboratory Austria (GLA) certificates and the Swiss Schweizerische Stiftung fur Edelstein-Forschung (SSEF).

Do not forget different colored gem stones 

Though diamonds are probably the most worthwhile gems, different treasured stones resembling emeralds, rubies and sapphires have additionally seen costs rise lately.

The Pure Gem’s Schrock says the place a gem comes from can affect on its worth. He says: ‘A ruby from Mozambique could be simply as excessive a high quality as one from Burma, however the Asian stone is price a 3rd extra due to its heritage – Burma has an awesome status for treasured gems.’ 

He provides: ‘The worth of a gem is a mixture of its intrinsic price, what it appears to be like like and its historical past, together with origin.’ 

Consumers must be cautious of ‘shopping for blind’ from road merchants when overseas. In Colombia, emeralds will be oiled to reinforce their color whereas sapphires from the Indian area of Kashmir and rubies from Sri Lanka could have imperfections crammed in to masks their true worth. Certificates assist keep away from such methods. 

Get your gems valued – and preserve them protected 

Diamonds must be saved protected and safe in addition to insured. Discover a native member of the Institute of Registered Valuers for knowledgeable valuation – for which you may pay from £50 per merchandise. Take images and preserve all documentation, together with buy receipts and certificates of authenticity, separate from the jewelry. 

Insurers usually ask folks to itemise gems or jewelry price £1,000 or extra. Particular person cowl may cost 1 per cent of its worth – so one thing price £10,000 may cost £100 a yr to insure. However as a part of that deal insurers may additionally need you to maintain valuables in a protected. It’s essential to make sure you get a professionally rated protected match to your valuables. 

Attempt funding funds with publicity to mining 

Publicity to diamonds and treasured stones can also be doable by funding funds. Examples embody JPM Pure Sources, which has a few fifth of its portfolio in mining firms that dig for diamonds in addition to treasured metals. 

You can too put money into inventory market-listed multinational mining giants resembling Anglo American. However this doesn’t come with out dangers. Within the final yr its share worth is down 8 per cent.