Investing Tips from the Experts at Guildhall Diamonds
When investing in diamonds, many consumers will get caught up in the beauty of a diamond or the hype of color diamonds rather than the fundamental information required to make an informed and educated selection for maximum returns.
Learn what Paul Wiseman, President of Guildhall Diamonds Inc. and son Jeremy Wiseman, Vice President think investors should consider when investing in natural fancy color diamonds in the interview below.
Paul Wiseman -Founder/President
Jeremy Wiseman -Co-Founder
Do you see any common mistakes investors make when purchasing color diamonds? Paul: Not doing their due diligence in one mistake but another more prominent faux pas is spending too much for a diamond that may not be “investment-grade” quality. There is specific criterion for higher end diamonds that people need to get educated about. For instance, SI (slightly included) diamonds are not generally considered an investment diamond.
What would you say is the number one factor for investors considering natural fancy color diamonds? Jeremy: Color, the amount of saturation and the rarity of the color is definitely going to dictate the value of a diamond in the market. Unfortunately a GIA report does not provide this type of information. That’s why it’s so important to see the diamond in person. This way you can see just how strong the color really is.
Does it matter what color diamond investors select? Paul: Generally speaking the rarer the color of the diamond when in a high clarity grade, the more value there will be for an investor. However, a 2 carat vivid yellow pear internally flawless for example can be just as lucrative as a .25 fancy pink pear very slightly. One should also note what is not considered an investment grade diamond and that would be a brown or black diamond – despite what you may hear to the contrary. Is there a certain hold time that people should adhere to? Jeremy: The general rule is, the longer you can hold on to a color diamond the better you will do. Color diamonds should be viewed as a long term investment and should not be thought of as a stock that you trade. In most cases you are not going to flip a diamond like you may real estate. That said, for those that can appreciate the rarity of these diamonds and hold them for ten years or more can expect incredible growth. They are true works of art that could be passed on to loved ones, held for as part of an education fund, or even used as part of a retirement portfolio. Gains over the longer term are incredibly exciting which makes them hard to let go of in some cases.
Is there a time frame that investors should look at when investing? Paul: Well color diamonds are not like traditional investments where there is a market you need to look at on a regular basis for dips or buying times. The time to buy is actually sooner rather than later. With dwindling supply and high investor demand, prices for these rare diamonds are increasing every year and in some cases, quite dramatically. We see Argyle pinks increase on average 20% – 25% per year (depending on the actual stone) so someone sitting on the sidelines, thinking about the investment may not be able to afford it a year or two later because the prices keep escalating. I hate to see people missing out so again, now is the time to get into this exciting market. So you love natural fancy color diamonds as an investment strategy? Jeremy: We are very passionate about quality rare color diamonds. Not only is it exciting to seek out beautiful and rare diamonds, it is also exciting to see the gains in value over the years.
Paul: Natural fancy color diamonds are extremely beautiful and rare and we’ve seen fantastic returns for our clients so it’s definitely what I believe to be one of the smartest and best investment strategies around.
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