A rock stable funding is difficult to return by throughout these unsure occasions – however a diamond is a glowing possibility that you just may take into account. 

Over the previous 12 months, the typical value for this valuable stone has risen by 6.4 per cent whereas over 5 years it’s up 6 per cent, based on the trade’s Diamond Costs Index. 

However a few of the highest high quality diamonds have seen costs rise by greater than a 3rd in a yr and are up nearly 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. 

All the time search out skilled steerage 

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 steerage is crucial. 

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 customers get exploited, overcharged or paid too little for a valuable stone of their possession.’ 

Kormind believes anybody desirous about 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 avenue retailers may attempt to promote diamonds at retail relatively than wholesale costs – consuming into the potential for future earnings. 

He provides: ‘As a person you have 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 should rise in worth by not less than 20 per cent so that you can make a revenue on them.’ 

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

Examine the ‘4 Cs’ to gauge high quality 

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

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

For a diamond, the extra ‘glowing white’ it’s, the upper the worth it would command. Yellow tinges tends to cheapen it. Should you go for a rock with a slight pink hue it’s possible you’ll pay way over for a white diamond, as a result of their costs have been hovering in recent times as they’ve develop 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. Up to now 5 years, some pink diamonds have greater than tripled in worth.’ 

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

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

The readability seems to be for imperfections and until you might be an skilled wanting via a ‘loupe’ magnifying glass, a minor blemish is more likely to be missed.

Think about how the stone may very well be a liquid asset 

Gems ought to be considered as a long-term funding – usually held for 5 years or extra. You’re normally higher off shopping for a smaller high-quality diamond – akin to 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 via 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 will get proof of high quality via knowledgeable certificates. 

Essentially 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 evaluate 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 essentially the most useful gems, different valuable stones akin to emeralds, rubies and sapphires have additionally seen costs rise in recent times.

The Pure Gem’s Schrock says the place a gem comes from can influence on its worth. He says: ‘A ruby from Mozambique is likely to 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 popularity for valuable gems.’ 

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

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

Get your gems valued – and hold them protected 

Diamonds ought to 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 pictures and hold all documentation, together with buy receipts and certificates of authenticity, separate from the jewelry. 

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

Attempt funding funds with publicity to mining 

Publicity to diamonds and valuable stones can be doable via funding funds. Examples embody JPM Pure Assets, which has a couple of fifth of its portfolio in mining corporations that dig for diamonds in addition to valuable metals. 

You too can spend money on inventory market-listed multinational mining giants akin to Anglo American. However this doesn’t come with out dangers. Within the final yr its share value is down 8 per cent.