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Understanding Diamond Value
The Rules of Buying A Diamond - A Consumer Guide

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A Consumer Guide to Diamond Value
How to get your money’s worth when buying your diamond “piece of forever.”.

Gas prices were up at the pump last year.  Food and clothing prices are not far behind.  Your house, where most people net worth may well lie, would currently fetch how much less than last year?  And you are now shopping for a diamond?!  Are you insane or something? No!

Congratulations on the marriage, anniversary, milestone, or occasion; the love you have chosen to celebrate with a diamond.  Because you are embarking on one of the safest, smartest, most significant purchases life has to offer.  At a very good time, also.

But you are also experiencing some sticker shock about now.  Diamonds are not just expensive, they are a lot more expensive than they were year ago. Even on the price sensitive Internet, the four types of diamonds frequently purchased online had seen price hikes.

  • Diamond Pricing: Why you get what you pay for?

    In the perfect world, the decision on which diamond, and where to purchase it, would be made regardless of price.  Rather, it would be made much like the event your diamond is celebrating; chosen for its beauty, significant, rarity, trustworthiness. In short, because it attracted you more than the others; here, we will discuss what it is about a certain diamond that can draw you to it like no other. This guide will help you cleave as close as possible to that principle while keeping a foot in the real world, where money is short.  In short, Its aim is to help draw you to your best diamond for your money.
    It is important to distinguish between diamond price and diamond price hikes, for they have very different impacts on you, the consumer.
    Price. Price is an illusion.
    The high price of diamonds is attributed to two principal causes.  The first, found readily at industry related sites, relates to the diamonds itself; a combination of its rarity, the difficulty in recovering it, and its clarity, color, carat weight, and cut. The second, found at sites hosting pundits with and/or critical of trade, relates to the “business end” of the diamond and the diamond and the pressures of global economy. The cost of marketing. Spot shortages.  The simple fact that it is a trade conducted in US dollars, currently worth far less than they should be. And the far less simple fact that it is a trade done largely on credit, making for a market highly prone to variable interest rates.
    Suffice it to say. A diamond of quality is rarer and harder to get to than you can possibly imagine; and the industry is now so competitive, automated, and rational that price is set long before you see it.  In short , the price of diamond is what it is.  Yes, It is an illusion about a piece of crystallized carbon that does not favor you, the diamond buyer.  It is, however, one that is systematically and rationally agreed upon by the very intelligent men and women who have been plying and refining the diamond trade centuries.
    On the other hand, price hikes tend to be more specific to the business end. Worrying as they are to the trade, such hikes actually favor the consumer. Prices for both rough diamonds and polished diamonds to the trade have risen almost twice what they have at the retail level.  It is on of the “unintended consequences” of huge 21st century changes in the diamond trade, all intended to protect price as the industry moved from what had been all but a monopoly, where price was protected at the supply side, to a more visible and rational supply chain.
    One should never buy a diamond as an investment. Unlike previous downturns in the trade, however, where pressures forced retail prices down, the diamond you buy this year will almost certainly fetch more next year. It will certainly cost more.
    Remember the average rise in internet diamonds?  The difference between price and price hike is the chief cause of that high figure, and a chance to reflect on this revolutionary way we now shop.  In privacy of our relationship to our monitors, we shop with illusion that we are engaged in some form of browser-barter, that we are locating some hidden source, or amassing our virtual collectiveness to buy below retail, below wholesale even.
    The Internet diamond vendor, however, is simply the new man in the diamond pipeline, prone as any to price hikes within the trade. Their “Discount,” come from lesser overheads, often chief among them, that many sites do not own or actually possess diamonds they are selling, but are rather listing stones currently offered to the trade, They can do that while jewelers can not.  As wholesale price spike, that advantage becomes smaller, shrinking margins proportionally and squeezing prices up.
    Does that mean it is no longer, or never was, advisable to buy a diamond online? Absolutely Not.
    For almost a century, a diamond was a “blind purchase,” made almost on faith, as the market savvy and gemological learning curves needed for a truly educated consumer were too steep for most to master.  The internet has forever changed that.  Knowledge is, indeed, power.  A little knowledge, however, is still a very dangerous thing, and browsing is a great way to get a little knowledge. The managing director of the Israeli Diamond Institute summed it up very well: “What used to be a blind purchase is now a confused purchase.”
    Anyone embarking on a diamond purchase should use the Internet, and this guide as a form of Diamond (or driver’s) Education. Learn the rules of the road, or diamond shopping, shown here at The Jewelry Hut. Then go to a trusted online jeweler and get behind the wheel.  Many times. As you will see, the more diamonds you look at, hold, compare to each other, the closer you will come to an unconfused purchase.
     
  • Diamond Value: When you should be flexible

    Given that you can not beat the diamond jeweler, you job as a diamond buyer is not buy cheap but to locate value among myriad stones. Value??  It is the difference between what you paid and what you got.  Did you get your money’s worth?
    Given that price is an illusion, what constitutes value with a diamond?  Add to that the likelihood that many of the diamonds you will look at will be set in jewelry, fashioned by jewelry designers whose task is to add value be melding a diamond and its precious metal setting with their own flair, and your task can feel quite hopeless quite quickly.
    It Should not, However.  A good part of the jeweler’s job is to simplify this complex decision, and if he/she is still in business, he/she is probably pretty good at her job. The moment if does begin ti feel that, however, go back to why you are buying a diamond.  That is your half of the value equation, and on that will call for: self-awareness; communication between the giver and receiver (if the diamond is shopped together); and flexibility as you learn more.
    Soon, you may be learning two of the jeweler’s great trade secrets.  The first is the cliche of the man hoping to economize while the woman tries to spend is, for reasons no jeweler has come to understand, reversed with the diamond engagement ring, almost all the time.
    The second is the occasion of buying and presenting your diamond is among the last where this diamond gift of love will have anything to do with the two of you. Women wear diamonds for themselves and for other women.  When a woman was asked after her diamond. She, far more often than he, remembers her diamond’s “clarity” and “color,” while he will know its size, to a point. Both will remember its price, though on occasion, the man has privately admitted that he would actually spent more than he let on.
    Self-awareness about diamonds is knowing, admitting, or learning which qualities are most important to you.  If your heart wants a diamond to make an impression, it is up to you to know, admit, or learn which impression it wants to make. It is to be able to say, and show: “This is a two caret diamond”?  Or is it. “This is a flawless diamond”?  Or “This is the most well cut diamond?
    If a diamond is shopped together, such decision will be made by communicating along a steep but ascendable learning curve. And be advised it will likely be stressful.
    Thus the need for flexibility. The days when a diamond engagement ring was a single solitaire round brilliant diamond has passed.  Round brilliant diamonds account for less than 50% of engagement rings sold in the US,  and a fast growing percentage are three or five stones rings, that often purchased as “semi-mount” rings. The smaller, flanking side diamonds and possibly a splash or two pave, diamond walls or accents created with diamonds as small as a point (0.1 CT) each, are already in such settings, requiring you only to select a center stone, “the main event” from an online jeweler’s collection of unset loose diamonds.  Such diamond rings are known, in the trade, as “total carat weight” or “CTTW” jewelry.
    Both present excellent opportunities for flexibility.  Fancy shape diamonds such as a “princess,” “cushion,” or “radiant” shape diamond s can save substantially per carat.  Fancy cut diamonds have a different look and feel than a round cut diamond, however, so it is advisable find an online jeweler carrying a number of diamonds shapes to compare!
    With CTTW rings and other jewelry, saving can be greater.  Owing to the rarity of large rough diamonds, prices climb exponentially as size, carat weight, goes up.  The “two carat” your heart desires can flexibly be had for a significantly less; if the main event diamond is, for example, 0.85 CT (or 85 points), sides stones are 45 points each, and the remainder accomplished in affordable pave.
    Take the aforementioned two carats.  It will be impossible, even for a large jewelry manufacturer with a great number of loose diamonds at his disposal, to pair all but identical 0.45 CT side diamonds to create a ring weighing exactly two carats.  Industry standards, and the law, allow tolerances of as much as 5% from stated weights. Short of taking the ring apart and weighing its diamond content, you must be able to trust your online (or off-line) jeweler. CTTW jewelrt is all about the look and feel. Multi-stones diamond rings should have a certain heft to them. Those $199.00 1 carat rings you see in Sunday advertisements, for most part, are CTTW jewelry.
    With gold and platinum prices at all time high, flexibility with metals can add to savings.  If your heart is set on a white metal, consider the large number of Palladium semi-mount diamond engagement rings and matching wedding bands.  Consider purchasing both rings together; or more frequently, after the ring has been sized or completed from a semi-mount to finished ring.  Not only will be able to pair rings that will be worn together, you will often find a jeweler in an accommodating position.

Customer Satisfaction is of paramount important to The Jewelry Hut.

Buy with confidence at The Jewelry Hut.

 

To Web Masters:

The article above can NOT be used on your web site or newsletter.

Bijan Aziz is the owner and Web Master for The Jewelry Hut.

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