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Regardless of whether you are considering a gift or want to think of this as an investment, diamonds do make sense for most people. Despite all the things that critics say, the demand for diamonds continues to soar. Most wholesale diamond merchants are predicting good things moving forward. Of course, like gold or precious metals that have an index, valuation of diamonds doesn’t follow a fixed norm, and that’s exactly why buyers have their concerns. If you are thinking of buying loose diamonds, here are some of the things you need to know.

Understanding the 5 Cs

Diamonds were traditionally evaluated based on 4 Cs, but now there’s also a fifth one. Let’s start with the four 4Cs first.

  • Carat. If you are buying loose diamonds, you have to be cautious of the term called ‘carat’. Contrary to what amateurs believe, it refers to the weight of the diamond and not the size. Also, just because a diamond weighs more doesn’t always mean it is expensive, because the other 3 Cs come into play.
  • Clarity. Diamond is a natural stone, and that means that it is not perfect. Most diamonds have blemishes and inclusions that are naturally found in the stone, and while these cannot be seen with naked eyes, clarity does affect the price of the diamond considerably. A diamond that doesn’t contain any inclusions or has minimal inclusions is typically graded as Flawless.
  • Color. You may not find color differences with naked eyes, but colorless diamonds are rather rare and often fetch the highest price. There is a color scale for grading diamonds, starting from D to Z. Colorless diamonds are categorized as D, while diamonds graded R to Z usually have a tinge.

  • Cut. This refers to the stone’s ability to reflect light and is often seen a measure of craftsmanship. There are various ways in which the cut is evaluated, and it affects the price of the diamond considerably. An excellent cut diamond with limited inclusions and color rating of G or less is likely to fetch a high price.

The 5th C

Certification is the 5th C that matters in buying diamonds. Make sure that the loose diamonds you are seeing are certified, and it is also equally important to choose a merchant that you can rely on. Valuation done right ensures that you will get returns on your investment, should there be a need to sell your loose diamonds later.

Andrew Slidell

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