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Buying diamond jewelry is a common practise, but buying diamonds and trying to turn a profit isn’t an endeavor most investors undertake. That’s largely because diamond investing is a little bit tricky, especially for those used to investing in precious or base metals, whose prices move more predictably. For one thing, unlike metals like gold and silver, diamonds are valued subjectively; there is no simple cost-per-ounce valuation system for them, so investors can be left wondering whether different appraisers will assign their diamond the same value. Colored diamonds, which are rising in popularity, only complicate that issue. Connected to valuation is the problem of selling a diamond. Most diamonds are sold through retail stores at very high profit margins — in other words, an investor looking to profit from selling a diamond necklace or other jewelry would like suffer an enormous loss. Those issues dissuade many investors from getting involved in the diamond space, but they are by no means unsolvable. Generally the trap market participants fall into is thinking that every diamond can be considered an investment; however, as industry experts have pointed out, that’s simply not true. So what types of diamonds are considered investment quality? Interestingly, most white diamonds do not fall into that category. That’s because about 98 percent of all diamonds are of the white variety, meaning they are not that rare. Essentially, while some can be a valuable investment, to do so they must be amongst the largest and highest quality. Many involved in the diamond space are instead looking to opportunities in the colored diamond space. Only around 2 percent of all diamonds are colored, meaning that they are very rare. Colored diamonds come in a myriad of colors, with red and blue being among the rarest and most pricy. Yellow diamonds fall on the more affordable end of the spectrum, and brown diamonds are cheaper still. For investors looking for an entry point to the diamond market, they may be options to consider. All that said, buying physical diamonds is by no means the only way to gain a foothold in the diamond market. Investing in diamond stocks is also a possibility, though doing so requires some careful thinking. That’s because diamond exploration is costly compared to exploration for other resources, and in today’s tough markets companies are receiving little funding. In terms of pricing, diamonds did not fare very well in the first half of 2015. However, hope remains amongst industry experts. John Kaiser of Kaiser Research said recently that he’s looking longer term for improvement, noting, “long term, if you’re optimistic about global GDP growth and believe that, say, 2020 and beyond India is going to finally get traction and start to imitate what China accomplished in the last 15 years, you’re going to see again expanding wealth and prosperity in the world.”

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