All About Diamonds: the main information for buyers

We would like to share the main information and intricacies about diamonds market with you, our friends. We have been actively working with the Israel Diamond Exchange for several years . We write this article because many people do not know the basic rules and details when buying diamonds and jewelry, so in consequence of which, people are losing money and are not satisfied. This is due to the dishonesty of some sellers. Who puts his bait now-a-days, above its reputation in this business, not realizing that their future revenues are directly dependent on this reputation. Although more and more people realize that buying a diamond, in addition to beauty, is also not the worst investment.
Below are some tips on how to buy diamonds and jewelry with them properly, to give classification,and  explain what you should pay attention on and to warn you about the most common mistakes.

We will focus on the retail diamond sellers, because basically you have to deal with such sellers and buy your diamond or jewelry from them. This is all kinds of private jewelers, shops with branded jewelry, etc. At each stage of the reselling the value of the stone increases. And you have the opportunity to buy a stone in the final stage or some link of the chain.
Therefore, you pay all the previous stages — mining, cut, certification and so on.

Classification of diamonds.

There are two assessment standards or scales: the first system is adopted throughout the world, which is used by giving the characteristics of the diamonds in Tel Aviv, London, New York, Hong Kong and other cities and countries. The second was invented in the USSR. The correspondence tables one to other system — you can easily find on the Internet. Further in the text we will use the international system of the characteristics of diamonds. So these are Parameters for which you will be paying attention and are strongly influence on the price of diamonds:
1. Weight
2. Color from D to Z. Starting with the color M, a diamond has a yellowish tint. The color D is also called «diamond of pure water.»
3. Pureness FI, IF, VVS1, VVS2, VS1, VS2, SI1, SI2, I1, I2, I3. Starting from SI1 you can see the inclusions in the stone by the naked eye .
4. Cut, has the terms: cut, polish, symmetry (only round stones). They are measured from the poor to excellent, depending on the cut quality. From the perfection of these parameters it depends on how your diamond will play in the rays of light.
There are 12 major cut shapes: Round, Princess, Marquise, Heart, Pear, Emerald, Oval, Cushion, Asscher, Baguette, Triangle. Also there are many derivatives with non-standard number of facets or else — very exclusive, such as the cut in the shape of a cross or a lily.
5. Fluorescence (this item is at odds with the rule 4C, but with a strong fluorescence stone loses up to 30% of the cost). Stones with a high level of fluorescence shine in the ultraviolet glow.

You can select these categories diamonds on our website:

Catalog

 

Evaluation of performance and certification of stones.

It is important to understand one thing, the actual characteristics of the stone without a certificate, valued at «professional» appraiser/ jeweler, the seller in the store who even gave you a passport of the stone, can be quite different, and not always will be in your favor. Just show the stone to several evaluators and you will never get the same report/characteristics. The only certificate that can guarantee characteristics and save you from fraud —  is the GIA (Gemological Institute of America) — this is the only organization which gives the lowest specifications that are as realistic as possible. Still, it is worth to note  the HRD, but the certificate has no such spread and trust as the GIA. That is it, all other certificates such as EGI, the IGI, or God save you from Israeli certificates of origin, do not guarantee proof that you have bought exactly what is written on the certificate.

To cite one example, when I was brought the stone for example with stated in the certificate characteristics: 1 carat, color of the F, clarity SI1, 3EX. After a simple magnifying glass it could be seen that the SI1 clarity overstated, and the color is under a big question. Price for such a stone is about $ 6000-6500. After sending the stone to GIA, we get the results: G / I1 VG VG EX. And the price of such stone is definitively not more than $2500-2900. Thus, average unprepared people, which is 99.9% of the customers, will never notice any trick and fraud, so  very hard to distinguish two different stones, no matter how much they were examined. But it is a reason and posibilities for the modern proprietor to earn extra three thousand dollars, like in this case. This is the business most sellers of jewelry are spoiled of. Overdone characteristics of just one color mark makes a profit of 40-50% of the cost of the stone.

Conclusion: If you want to get exactly the stone with characteristics which you have paid for, and not to face the fact that someone in assessing diamond/s would understate and cheat, you by all means should require GIA certificate when purchasing diamonds. Everything else is a kind of «a pig in a poke.» Generally, the stones with GIA certificate are about 10-20%  is more expensive (which partially make up the cost of the certificate), but believe me that’s worth it. The difference you can lose is much more, as described above. Also please know that no one would ever challenge this certificate. This applies to purchases of diamonds all over the world.

 

Cost estimate.
Kind of an international price list is  from the RAPAPORT  company  (There is an analogue  IDEX — but it is not very popular). RAPAPORT publishes two types of prices, the first — the price of round stones, the second price is for fancy cut stones. There is no Unified price list on colored stones of fancy cuts. The price for diamonds is formed by history studying and of similar stones sales, plus looking at the existing market of the stones.
In general, it has always been a mystery and difficult to understand, even studying prices for diamond jewelry — how the ring that can be purchased for € 300-400 from us, in retail stores can cost € 800-1000 after 70% discount? And the most important thing that the claimed characteristics in stores usually appear lower than it actually come indeed.

Diamond as an investment.
Stone for investments which, in the future, will be easier to sell:

  • Color: D-G
  • Cleanliness: IF — VS1
  • Cut: Round
  • The weight of 1 carat.
  • Certificate GIA.

Generally a diamond stone can be viewed as a means of preserving capital. Because, in contrast to the currency or real estate, diamonds have no sharp jumps, and they are ideal for hiding your assets from prying eyes. In our opinion, the purchase of a diamond is example of  excellent  investment for such aims as the future education of a child or marriage/wedding. Many years later, when you need money for a good education, none of the existing kinds of investments to date, has shown such stability for capital preservation as diamonds.
And the diamonds as a result show steady growth, sometimes with very small (a few percent) drawdown in value, but followed by an increase. In addition, over the past decade no major diamond mining deposits have been discovered, so that have created a shortage in the natural diamond market. Already and in the medium term, mining companies will have to develop small and marginal fields, which causes a strong increase jump in prices of diamonds.
The highest growth rates over the past 10 years, was shown by diamonds weighing from 3 to 5 carats.

Pricing

There are several international electronic trading platforms, where the companies put its diamonds for sale. This is the starting point of the value of the stone. It is here where wholesalers and major jewelers buy large stones from around the world.
When a diamond comes on a retail market all intermediates plus their income and PVN/VAT.

In general, diamonds price to the buyer is formed based on the different stages:
1. The seller being the owner of rough diamond stone sells on the verge of cost, without any overhead expenses on advertising, shops, etc .;
2. The proposed certificate is different from the standard evaluation of GIA.
The first case is extremely difficult to explore, because as a rule of fact, all such diamonds are bought by large dealers under direct contracts, and for buyers in the tourist trip is particularly difficult, even some organization was engaged with «Lapidary Works» or any company so called «Internet Consultant» — all are essentially middlemen. The very cheating on the diamond market is that, unfortunately, 95% of retail sales are performed without proper certification (like mentioned GIA).

Misconceptions  you may face with:

1. The seller considers the total weight of the stones included in the product
Let’s say, you buy a ring with one major stumbling at 0.5 carats, and  many small weighing 0.8 carats around. So the seller insists that the total diamond weight of 1.3 and begins to show you the price per carat. You should not be misled by a large number of small stones, it is the dust that remains after cutting the large stones, and the cost of such a small stone around €5-10. Even, if there are 20 pieces, it’s just €100-200. At that time, a stone of 0.5 carats with good features will cost €900-1300. In other words, one stone of 0.5 carats and 40 stones with a total weight of 0.5 carats differ in price significantly, by about 8 times.

2. Stone in 0.3-0.5 carat is too small to do that GIA certificate for him.
This statement is absolute nonsense. There are myriad of good Stones of this size with necessary certificates.

3. A Ring is exclusive work and therefore the cost exceeds the total value of the stone/s.
The same delusion, as we talk about the stones of 0.3 carats and bigger. This should be a ring with an exclusive performance from the world’s leading designers. The average cost of production of a ring does not exceed €100-150/gram of gold. If the jewelry is made by your requirements or sketches, and will be manufactured as a unique single item, only then the value of the designer and manufacturer of mold is added to the price.

4. The company or shop is a branch of the Israeli Diamond Exchange.
The Diamond Exchange has no branches and it does not sell the stones, especially ready jewelry. The Exchange is a huge marketplace, consisting of four skyscraper buildings in Ramat-Gan. The Exchange employ a large number of different companies such as diamond merchants and diamond cutters and brokers, etc.. But access to there is closed for «a man from the street». So the most of what you can expect is to get the personal invitation from any of the exchange members.

5. Free tours to Tel Aviv and the stock exchange.
Some agencies are advertising the tours with flyers and coupons with discounts of 25-50% on purchases in certain stores. By making a purchase in that particular store, your price will be higher at least 15% — that is the travel agency commission! And the flyer is just a piece of paper — the acquisition of the customer who came from referral (to whom pay a commission).

Tips for buying and bargaining:

1. We strongly recommend to study all the information about diamonds market and clearly understand what you wish to purchase. During a first conversation with seller you should handle the terms and discuss the characteristics.
2. To make sure  you would not deceived and planted stone with a fake or not appropriate certificate, ask the seller to weigh a stone right before you, and pay an attention for an electronic caliper and measure the stone in all three dimensions. If the weight and dimensions exactly the same with the data indicated in certificate, it means the diamont stone corresponds to certificate, by 99.9%. Because to find and choose the other identical stone in weight and size is very difficult.
3. Keep in mind that fancy cut stones are less expensive than round.

The «Pontima Diamond» company offers help to you with purchasing and investing in diamonds.

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