Diamond Investment Value

There comes a point in every sale my client asks, ” Is this diamond a good investment?” This is an important question on everyone’s mind! The simple answer is no! Of course we need to define investment before the complete answer is fully understood. Everyone defines “Investment” in his or her own way.

My personal definition is that an investment must pay a dividend every month to qualify as a financial investment. However how can I or anyone else value the Emotional Investment of a fine Certified Diamond? The fabulous feeling one gets wearing a top quality diamond with all of the sparkle, brilliance, and scintillation may be the best personal investment one can make. How can anyone place a value on the comments of friends or the admiration of a stranger when viewing the baby on you hand! What better investment could one make!


Perhaps a more accurate question would be, “Is a diamond a good value when spending my hard earned money?” This answer is much simpler, a great value! Ask yourself what item can I purchase other than a diamond, that holds it’s value and can actually increase in value over time other than my house?

Buying a diamond is like gaining a friend for life. It is the only Gemstone, which is universally recognized, the hardest known substance in existence and talks to you everyday! That’s what I call a great investment!

Guide To Diamond Care

You slip the ring on your finger, or hold the earring up to your ear, and you can’t believe the flashes of light shimmering off that diamond. “It’s stunning,” you think to yourself, “and I don’t ever want to take it off.”

A diamond is a treasure that should last a lifetime, and with the right care and maintenance, so can that incomparable sparkle. At Spence Diamonds, we want you to enjoy your diamond’s sparkling beauty for generations, so here’s a few “dos and don’ts” of caring for your new diamond:

It is okay to:
* Clean your jewelry in warm, soapy water with a soft brush
* Use a mild soap, such as dish soap
* Use products designed specifically for cleaning diamonds (ask us in store for details)

It is not wise to:
* Wear your jewelry when using abrasive cleaning products, or ones that contain bleach or chlorine
* Wear your diamond during manual labor activities, while using heavy equipment, weightlifting or while playing sports (for your own safety as well as that of your jewelry)

The setting of your diamond and the metals used in bands, bracelets and necklaces should be taken into consideration, too. Especially in the case of gold, you want to be sure that the cleaning products you choose won’t tarnish the finish of your precious metals. By following the guidelines above, you should be able to keep your valuables in showroom shape, plus it gives you a perfect use for your old toothbrushes! On that note, its best if you stick to mild soap and water with your toothbrush. Today’s new toothpastes are great for getting your teeth whiter, but are usually much too abrasive for your jewels.

Everyday wear and tear, and even the perspiration and natural oils from your fingers can have an effect on your jewelry’s natural glow over time, so a regular cleaning will ensure that they always look their best.

HRD Colored Diamonds

No two diamonds are exactly alike. However when it comes to color it is obvious that the colorless to light yellow diamonds form a much more homogeneous category than the colored diamonds. This last group displays a bewildering variety of colors, and small nuances can make an important difference.
provided by Aurara Gems Collection.

Colors can vary considerably depending on the circumstances in which the stone is viewed. Diamonds appearing brownish-pink in daylight can be miraculously transformed into wonderful reddish diamonds under a more yellow light source. Other diamonds, aptly called “chameleon-type,” actually change color under the influence of different circumstances. Some of these take their time in returning to their original hue, so that it is possible to actually see them change gradually over a period of time after exposure to different light. For instance, some pink diamonds may suddenly turn brown when illuminated with ultraviolet (UV) light, only to return to their original color after being removed from UV light. Other diamonds can temporally change color when kept in complete darkness for a while, or when they are heated.While judging “normal” colors is mainly a matter of comparison with master stones to see whether diamonds is darker or lighter than the test stones, evaluating color diamonds is a much more complex problem. The description of colored diamonds proves to be a real challenge to a diamond-grading lab. Colorimetry is in itself a complex matter, and the fact that diamonds have very specific physical properties does not make matters any easier.

A Lab must therefore develop a system for diamond color grading that takes into account all possible problems such a system must meet certain requirements:

1. It must be scientifically sound and based on objective standards
2. The nomenclature used must be clear to the client. Scientific jargon must be translated into terms intelligible not only to the professional but also to the consumer;
3. The system must be transparent and not unnecessarily complicated;
4. Consistency must be sufficiently guaranteed;
5. And the system must answer the needs of the market.

In designing the Antwerp diamonds high council (HRD) fancy color system considerably effort was made to combine all these factors. It goes without saying that maximum consistency is the primary concern. The other issues demand a compromise between scientific accuracy and complexity on the one hand, and transparency and accessibility on the other hand.

The first step was to look for a reference standard to be used as a basis. Extensive tests have proven that color description based purely on visual observation without reference material is not reliable. Therefore, the Munsell Book of Color was chosen to serve as the reference standard for the HRD system. From HRD’s point of view, an extra recommendation is that the firm Macbeth, editor of Munsell Book of Color, is certified according to Internationals Organizations for Standardizations (ISO) 9001 standards and that all Munsell color samples are precisely measured spectrophotometrically to ensure that strict manufacturing tolerances are met. All Munsell standard measurements are furthermore traceable to NIST (National Institute for Standards and Technology). CIE data (International Commission on Illumination) are also available.

The Munsell Book of Color is a collection of color standards, in the shape of removable color chips, catalogued according to the three color parameters - hue, chroma, and value. For the description of the three parameters, Munsell has given each parameter a numerical scale. Each color chip in the book can be identified by its unique combination of numbers referring to the three scales. Each color card can therefore be defined by the so-called “Munsell Notation” - HV/C (Hue Value/Chroma).

Hue is the parameter distinguishing between red, yellow, green, blue and purple. These colors fade into one another. Black, gray, and white do not have “hue”; they are called “neutral colors.” All other colors that do have hue are called “chromatic colors.”

Value is a parameter to distinguish between light and dark colors. The scale runs from 0 (black) to 10 (white). The scale can be used both for neutral and chromatic colors.

Chroma expresses the measure of saturation of the color. It defines whether it contains a “weak” (i.e., low chroma) or “intense” (i.e., high chroma) color. The scale starts from 0 and can, for normal materials, range to approximately 18. This system is (relatively easily applied to color diamond grading. The diamond is compared to the Munsell color cards, and the card that resembles the color of the stone the closest is determined. Once the right color card has been selected, the color can be named accordingly.

It is possible to describe colors on various levels of accuracy. This system couples a certain name to each of the Munsell color cards. This name consists of various elements. First of all, there is a description of the hue, giving names such as yellow or yellow-green. Secondly, each color chip also gets a prefix, based on the combination of the value and the chroma. A color with a certain chroma can have a high or low value and vice versa. Prefix and color hue together (e.g., moderate purplish-red) should give quite a good idea of the color, even without seeing the diamond and without having access to the Munsell book.

The color hues give a good indication of the color, and the prefixes used by the National Bureau of Standards (NBS) are very detailed, but for noncolor specialists they can be confusing. Therefore, HRD has simplified and adapted the NBS system to make it more suitable for the description of diamond color. It was certainly not the intention to suggest that this is an improvement on the NBS system, which, on the whole, is very sound and logical. On the contrary, it is in fact a simplification dictated by the needs of the specific application in question, which does not allow the system to be used in its entirety.

In practice, colored diamonds are often referred to as “fancy colors.” However, the undiscriminating use of a term renders it useless and it is therefore not advisable to simply use this for every color outside the colorless-to-slightly-yellow range. Most people in the diamond trade agree that “fancy” should be reserved for especially “beautiful” and “attractive” colored diamonds. For a lab, of course, this is not a workable definition as it is based on purely subjective taste. Therefore, a definition was drawn up combining requirements as to color hue and intensity - the diamonds must have a pure color and the intensity must fulfill certain criteria, dependent on the hue.

In an attempt towards classification, diamonds can be divided into three large groups - diamonds with a yellow color hue, diamonds with a brown/gray color hue and diamonds with a different color hue. This can be schematically represented as demonstrated below. Only the diamonds falling in the shaded zones can be called “fancy.”

It goes without saying that this grading system is supported by the use of master stones defining certain limits. The descriptions are, after all, open to interpretation, and comparing diamonds with reference stones is still the best method to ensure consistency in grading.

Talking about consistency and repeatability, it is important to stress that the final decision is always based on the judgment of several graders (as are all decisions in the HRD lab, whether it concerns color, clarity or cut).

The grading system described here has been in use at HRD for many years, and has amply proved to be practical and serviceable. Nevertheless, constant efforts are made to optimize the techniques, and if possibilities for improvement occur these are integrated in the system.

Note that all the preceding remarks apply to natural diamonds with a natural color origin. Diamonds owing their color to artificial treatment or synthetic diamonds are, predefinition, not graded by HRD.

PREFIXES USED BY HRD:

Faint: The color hue cannot be perceived through the crown side of the stone, and is only faintly noticeable through the pavilion side. For example, faint pink.

Light: The color hue can be perceived through the crown side, and is clearly noticeable through the pavilion side. For example, light blue.

No Prefix: The color hue can be clearly perceived through the crown side and the pavilion side of the stone. For example, blue.

Intense: The color hue is very noticeable through the crown side. Saturated color with normal to high value. For example, intense yellow.

Dark: The color hue is very noticeable through the crown side. Saturated color with low value. For example, dark yellowish brown.

Translucent: “Translucent” in this context is used according to the scientific definition, i.e. “transmitting light but not transparent.” In other words, translucent stones have a reduced transparency. The intensity is not further specified. For example, translucent white.

The Proper Way To Buy A Diamond

The process for buying a fine top quality diamond is much more simple than the jewelry industry would like you to believe! The reason is simple, if the public knew how easy it really is to purchase a fine top quality diamond, they simply would not allow the large sums of money, profits made by the retailers, for the very simple service they are supplying. This is the result of an extremely inefficient distribution system that has been in place since the beginning of time.

Believe me I am not interested in wasting your time. What I am truly interested in arming my client with the correct knowledge enabling them to make the best decision based on facts while removing as much of the emotion as possible. The jewelers, diamond brokers, and dealers have a bad habit of trying to confuse their clients with:

1.) Too much bad information.

2.) Too many concepts which confuse the client,

3.) Too many extraneous ideas or personal opinions that play no part in the decision-making process which lead to

4.) Too high of price!

I have found the best things in life are usually the simplest. The decision making process for just about everything is becoming too complex. It seem the more complex things become, excluding the technology industry, the higher profit margins are justifiable!

The best way to purchase a fine high quality diamond is:

1.) Gain a basic understanding of the qualities a fine diamond

2.) Set a personal budget

3.) Obtain a realistic idea of what diamonds cost – Please see my revolutionary “Diamond Price Calculator” under the Current offers heading also under the Diamond 6 c”s “Cost”

4.) Insist on a GIA Diamond Certificate with any diamond you purchase remember “Trust but Verify” and

5.) Find your dream diamond at the lowest possible price armed with the above information.

Your time is very valuable. In fact it is your most precious personal asset because of the nature of its limit. Take the time to understand diamonds, use the revolutionary, “Diamond Price Calculator” to realistically identify the price at which you should pay for your dream diamond. Then go into the market and search out the your diamond at your target price.

If this information has allowed you to purchase the dream diamond from your friend or local jewelry store at a price that satisfies you than I have performed a valuable function and helped you make a very efficient purchase saving you a ton of money. However make sure you get a Certified Diamond by GIA so you can be assured of the diamond quality you purchased.

Diamond Common Sense

In today’s world it is becoming harder and harder to make the money necessary for enjoying the good life. In addition there are many more items tempting our attention for purchase consideration. It has always been my view that my client should decide what their exact budget is before they proceed into the market for a diamond purchase. That way they will be able to live within their family budget while enjoying the fruits of their labor and their diamond purchase.

It is my job as your AGENT to help you determine the exact diamond size and quality, which fits your budget. Having a firm understanding of the target diamond I locate the best possible diamond at the lowest price. As I do not have any inventory, you will never be offered anything other than what we agreed on was our target diamond.

It is extremely important for my client to have a clear understanding of diamond qualities and the benefit of my experience to know where corners maybe cut and where not to cut corners. I call this the sizzle but not the steak pricing. Example a 2.00 carat F color VVS1 clarity round diamond wholesales for $30,400 and an F color VS2 clarity round diamond wholesales for $23,400. If I locate a clean F-VS2, which with ideal cut, I believe visually you will not be able to tell the difference from the F-VVS1 except in the cost.

Now if you are an engineer and really understand the difference and are willing to pay the difference that is another matter, however my personal view is keep your money for another item and buy the F-VS2. This of course is strictly a personal decision however common sense would say sizzle but not steak or have your cake and eat it too!

How Does The Market Price Diamonds?

There are as many ways to price diamonds as there are market makers. However the following are a few of the pricing guidelines and channels of distribution the jewelry industry uses:

One formula or another is applied to the original price of the rough diamond by the diamond sight-holder (company who purchases the rough diamond from De Beers), in order to determine the final selling price of the polished diamond to the: diamond dealers, jewelry manufactures, diamond wholesalers, diamond brokers, and jewelry retailers.

In order to identify the fair market value for a fine important polished diamond, an independent company must first certify the polished diamond’s quality grades: color, cut, clarity, carat weight.

The Sight-holder determines their selling price by adding the cost of the rough diamond, cutting cost, financial carrying cost, and profit to the polished diamond.

The cutter take the diamond to the market in the Diamond Dealer’s Club and makes a market called the Primary Market. This is the price level we Make A Market at by offering diamonds for sale direct to the public through these channels.

The diamonds may change hands between dealers several times at this point finally being directed to: diamond wholesalers, jewelry manufactures, and jewelry retailers. If the diamond does not reach the retailers at this point, additional profits are added at each turnover until the retailer obtains the diamond.

Having finally reached the retailer, the diamond’s cost is magnified by a large percent, Gross Profit, to cover the retailer’s cost of doing business.

The percentage mark ups on fine large diamonds through the inefficient distribution channels result in very large dollar amounts.

Diamond Insurance Tips

Working with Insurance companies can become very tricky when it comes to replacement of lost or stolen jewelry. The Insurance companies usually require an extra rider clause to your homeowner’s policy for any jewelry valued over $300.00.

This rider must be purchased and in force at time of purchase. In addition Insurance Companies require documentation of all jewelry items via current jewelry appraisals. This is only the beginning. If you do not have a Certified Diamond with a proper Diamond Report, the Insurance Company will see this as an opportunity to attempt to replace your diamond with a lower quality diamond. Remember an Insurance Appraisal which values a non-certified diamond is only someone’s opinion of the diamond quality grading and value, leaving much room for interpretation when the issue of diamond quality is being addressed.

This is another very important reason to require a Certified Diamond when you make any important diamond purchase. A diamond that has a Certificate allows no room for misunderstanding on anyone’s part when it comes time for replacement because of loss or damage. The Insurance Company is required to replace all items in “LIKE AND KIND” no excuses no deviations of quality or size regardless of current market prices. Of course you must have current appraisals. I suggest current appraisal means at least every 3 years.

Another important area is “coverage or insured amount”. All insurance premiums are base on “Replacement Value” covered by the current jewelry appraisal. On the one hand Insurance Companies love to collect high premiums based on inflated Replacement Values, on the other hand they require any payouts to be fully documented and can choose to press the client to accept a lower payout if their jewelry documentation is not completely in order!

Our experience suggests that the greatest need for insurance comes from the following causes:

Theft is more prevalent than most people expect. A diamond ring left in a suitcase while on an airplane or enjoying the beach can suddenly disappear. A diamond ring left for just an instant in a public washroom will probably never be seen again. Uninvited “guests” in your home seek out your jewelry drawer in your bedroom dresser for a quick touch of larceny.

Accidental loss happens when you least expect it. A single prong weakened by years of wear can suddenly release its hold on your beautiful diamond and you’ll not likely notice the diamond loss until it is too late. You wouldn’t believe all the diamonds that fall out of mountings while working in the yard or doing dishes.

Damage can occur for even the hardest of gems. While a diamond is hard, it’s crystal structure can fracture if struck by a hard blow exactly in the right spot. The wrong bump with a grocery cart or a door handle can cause thousands of dollars in damage in an instant.

The bottom line is to get your diamond insured immediately and be sure your insurance covers damage, loss and current Replacement Value.

The Female Diamond Mindset

The differences between men and women have been made famous by author, John Gray, in his book Men Are From Mars, Women Are From Venus. The differences between Martians and Venusians are clearly apparent when it comes to a diamond purchase.

Guys, listen closely and we will tell you some secrets that you need to know about Venusians if you want to thrill her with a diamond ring. Venusians are casually interested in diamond quality grades such as color and clarity while Diamond Certificates and Investment value have less meaning. A diamond ring is a gift from the heart with the highest emotional attachment!

When it comes to the diamond, Venusians are interested in three things:

1. Does it look big?
2. Does it sparkle?
3. Does it look big?

We are not necessarily saying Venusians don’t care about quality. But as long as they cannot see any black spots with their naked eye and it does not look yellow, they are not interested in the differences in clarity and color grades, whether it has a certificate, or what store you bought it at.

You need to understand that their emphasis on big size does not mean they are greedy or materialistic. Rather, they view the size of their diamond as a physical sign of your love for her. This becomes very important in the fascinating post-engagement ritual of “let’s compare diamonds.” The very first thing your Venusian will be thinking about after you give her the diamond is, who can she show the ring to? Everyone will be politely saying how beautiful it is while comparing it to their own diamond ring.

One of the most difficult aspects of buying a diamond for a Venusian is the dilemma of trying to make it a surprise and yet making her happy by getting something she absolutely loves. The problem is that you cannot take what your Venusian says literally. If she says “You didn’t have to get me flowers” what she really meant was that she loves the flowers and please keep on surprising me with them. Most Venusians are pleasers and will tell you what they think you want to hear rather than what they really feel.

Venusians are just dying to tell you what size diamond or what kind of mounting they would love, but they fear that would seem too bold, forward, or even just plain greedy. Instead they will make comments like “It doesn’t have to be big” or “I’d be happy with anything you pick out.” Now think about that for a minute. Would you as a Martian like your Venusian to pick out your stereo system, your golf clubs, or your car? An engagement ring is something the Venusian will be wearing every day for years and you want her to be thrilled every time she looks at it. Your goal is to get her the diamond of her dreams, not necessarily what you like.

A word of caution is warranted when casually shopping with your Venusian. By their very nature, Venusians like the sport of shopping. When they walk by a jewelry store in the mall and point to a ring in the window, it does not mean they want that ring on their finger for the rest of their lives. They are pointing out new and unique things, it is you job to be completely clear what shape and size your lady dreams about and make that dream come true!

Diamonds Guide to Jewelry and Allergies

Choosing just the right jewelry for you goes beyond how good it looks on you, or how good it makes you feel. Some people have allergies to certain metals, so it helps to understand what to look out for if your skin is extra-sensitive, or you are prone to allergies. In our Spence Diamonds showrooms, we’re always ready to answer your questions about how metal allergies can affect you, but in the meantime here’s a bit of Metal Allergy 101:

Most often, rashes and infections on your skin caused by jewelry are a result of nickel allergy. Ever had an itchy red spot under a jean stud or watch buckle? Maybe when you had your ears pierced you developed an unusually uncomfortable reaction?

Nickel is the metal that causes the most rashes. And it is also quite commonly used in almost anything metal, for e.g.: jewelry, kitchen utensils, scissors, paper clips, keys and of course the coin by the same name. Nickel has a more whitish appearance, so such metals as white gold, silver and all kinds of silver-coloured metals (other than sterling silver) can and likely do contain some amount of nickel. 18 or 24 carat yellow gold do not contain nickel, but 10-carat yellow gold may have traces of nickel, too.

How Do You Know if You Have an Allergy to Nickel?

The first sign of nickel allergy is red and itchy skin, in the areas that have come in contact with metal, such as under a ring or necklace. Later on, tiny water blisters appear, making the skin moist and even oozy, and can even cause it to peel off. At this point, you probably want to be searching for jewelry that cooperates with your skin a little better. If the condition carries on for a long time, your skin may become red, scaly and cracked, and the rash can spread to other areas of your skin that have never even been in contact with nickel! So it’s worth doing your homework on how to avoid such a reaction.

Some Good News, Some Bad News

The bad news first: Once you’ve become sensitive to nickel, you’re likely to stay that way for the rest of your life. The good news is that over time, you may become less sensitive to nickel allergy. But there is hope as there are still plenty of metals that you can safely wear, including 18 and 14 carat gold, sterling silver, and a number of other hypo-allergenic metals. In addition, if you discover an allergy to nickel with an existing piece of your jewelry, Spence Dimaonds offers an electrochemical process called rhodium plating that coats the ring and protects your finger from exposure to nickel. It is a very easy and very common process that will not harm your ring in any way.

Why By A Certificate Diamond?

There are many important reasons to require a Diamond Certificate with the diamond you are purchasing:

All aspects of diamond quality (color, cut, carat weight, clarity) are verified by an independent company with no conflict of interest between buyer and seller.

* The cost of the Diamond Certificate is a small price to pay to insure the diamond quality you pay for is the diamond quality you receive.

* Important diamonds need to have a Diamond Certificate to ensure the proper buying and sell of the diamond.

* Any important diamond, which does not have a Diamond Certificate, will require one the next time it is placed in the market to ensure proper pricing.

* A diamond, which has an exact quality grade, Diamond Certificate, can be easily valued based on the wholesale cost sheets used by the diamond cutting industry.

* Diamond Certificates take most of the guesswork out of the buying process.

* A Diamond Certificate verifies the diamond quality in any disputed with your insurance company in case of a loss.

* When someone tells you, “A Certificate Diamond costs more” what they are really saying is, “Trust me I can sell you an inferior diamond at an inflated price”.

* Remember, “Trust But Verify”.