HOW TO BUY AND INVEST IN DIAMONDS
An investment in high-quality diamonds (10 carats and more) is ideal for protecting assets. An investment portfolio can also be supplemented and diversified. However, if you want to buy diamonds in order to speculate on a rising diamond price and thus achieve capital gains, buying diamonds is less advisable.
THESE REASONS YOU SHOULD BUY DIAMONDS
Buying high-quality diamonds protects your assets against various risks. For example, rising inflation, a financial crash, or even a currency collapse. Buying diamonds is a good choice for this asset protection, as they have proven to be a stable form of investment for centuries. If one day paper money is no longer worth anything, high-quality diamonds will still have value. In better times you can sell them again. Register for our free webinar:
Experts advise, depending on personal security needs , to buy diamonds with about 5-10 percent of your own wealth. The minimum investment for real investment diamonds starts at around 500,000 euros. Diamonds in the lower price segment are gemstones that are hardly suitable as an investment. This price represents the boundary between a gemstone and an investment diamond. Buying diamonds is not recommended for smaller fortunes – in this case, colored gemstones such as rubies, sapphires, emeralds or tanzanite are very interesting.
In addition to wealth protection, you can also benefit from other advantages when you buy diamonds. Unlike gold, there is no government registration requirement when buying a diamond. Diamonds do not (yet) have to be declared in the income tax return. The purchase of diamonds is generally subject to a VAT rate of 19%. This VAT does not apply in the first step if you decide to store the diamonds in a duty-free warehouse when you buy them. The sales tax rate of the country to which the diamonds are to be delivered then applies to the subsequent delivery.
DIAMONDS AS ESCAPE CURRENCY
Diamonds are the ideal escape currency because they have an extremely high value density. In an emergency, assets can be transported across borders and through any airport scanner easily and unnoticed.
High-quality diamonds from 500,000 euros offer real protection against inflation due to their natural scarcity. Cheap diamonds are not suitable for this. That is why the carat price of high-quality investment diamonds has practically never fallen in the last hundred years.
Since diamonds, in contrast to real estate, do not require maintenance, they are ideal for preserving and securing values for generations.
Diamonds are valued as a safe investment, especially in times of crisis. Nevertheless, one should not wait until a financial crisis has broken out before buying diamonds. Just when there are already the first signs of a crash in the stock or bond markets, galloping inflation develops or the collapse of our monetary systems is announced, the diamond price rises significantly and it becomes more expensive to buy diamonds. In addition, there could be a veritable run on diamonds, so that further price increases and delivery bottlenecks must be expected.
If you want to invest in diamonds, it’s best to start right away. Thanks to this diversification, you are prepared for any crisis and your assets are additionally secured. The German Gemstone House will be happy to help you.
WHERE CAN I BUY DIAMONDS?
As an investor, once you have decided to buy diamonds, the question arises as to where real, high-quality investment diamonds can be obtained from?
It is possible to buy diamonds from jewelers as well as on various portals on the Internet. In most cases, however, these are gemstones and not investment diamonds. Especially on the eBay auction portal, only gemstones are offered for sale, even if they are in a higher price segment.
These jewelry diamonds are characterized by a much lower quality, rarity and clarity and are therefore offered very cheaply. Diamonds under one carat are virtually impossible to resell. Extreme caution is called for with such bargains. Such stones are not suitable as an investment and can usually only be resold, if at all, far below the purchase price.
In general, before buying diamonds, the quality should be checked with a laboratory report. Note the “4 C’s” of gemstones: Clarity, Carat, Cut and Color. Reputable dealers have a laboratory report from an internationally recognized gemological testing laboratory. These would be, for example, those of the German Foundation for Gemstone Research, the DSEF in Idar-Oberstein , the company Gübelin Gem Lab Ltd. in Lucerne (Switzerland) and the SSEF in Basel (Switzerland) .
In addition, the price should always be determined by an appraisal by a court-certified expert for gemstones in Germany. Only these appraisers create valuations that are also recognized by courts or insurance companies.
WHICH DIAMONDS ARE AVAILABLE TO BUY?
Diamonds can be bought cut or uncut. As an investment, however, we only recommend cut diamonds. Why? Because there is a great risk that the diamond will break or chip while being cut. This drastically reduces the value of the stone. This risk should therefore be borne by the grinder, not the buyer. Basically, you should look for the highest possible quality.
If you want to buy diamonds, you should also consider storage and packaging in addition to the 4 C’s. It is advisable to buy diamonds only in safety packaging. The diamond is sealed in a clear plastic blister with a serial number on it, which can then be matched to a lab report and appraisal. This is the only way to ensure that you actually received the gemstone listed on the laboratory report and that you do not own an imitation.
Since diamonds are bought anonymously and without the obligation to report (like gold), you have to think about the best and safest way to store them.
First you should decide whether you want to keep the stones at home or in a safe place such as a safe deposit box.
BEWARE OF A BANK LOCKER
Many people think of a safety deposit box as the first choice for storing diamonds. But there is something that many are unaware of.
- The opening of each safe deposit box is reported by the bank to a state central reporting office.
- In addition, the emergency law allows the state to even open safe deposit boxes in special crisis situations.
- Here is how these assets can be accessed.
- The initiation of bankruptcy also leads to the opening of the safe deposit box in the presence of a tax officer.
Therefore, if you are planning to store it in a locker, it would be highly advisable to look for a reputable private provider in Germany or to choose a provider abroad, far from the access of the German state.
If you store the diamonds at home, you should definitely clarify with your insurer which requirements are necessary for appropriate insurance cover. A small, very simple safe is usually not enough. Although often ridiculed, diamonds can easily be buried in the garden. However, since you cannot be found by metal detectors, you should remember very well where you buried your treasure. Diamonds come from the earth. Therefore, they can easily remain buried in the ground for decades or even centuries without losing their value and beauty.
ADDITIONAL COSTS WHEN PURCHASING DIAMONDS
Purchasing high-quality diamonds always involves additional costs. These are primarily incurred for the valuation reports and the laboratory reports . Finally, the storage costs have to be taken into account. Storage at home is much cheaper, but also much more risky than storage in a locker or bank vault.
THINGS TO KNOW ABOUT DIAMONDS
Diamonds have attracted everyone, not just women, for thousands of years because of their beauty.
Diamonds come from the depths of our earth. It is a mineral like many other gemstones. The difference lies in the purity of their composition, the symmetrical internal structure that gives them hardness, and various inclusions that man-made diamonds do not have.
Why small gems are not an investment is that they are not rare. While about 1,500 tons of gold are mined annually, about 22 tons of diamonds are mined each year. High-quality gemstones in the investment price range of 500,000 euros and more, on the other hand, are found in the kilo range. This makes high-quality diamonds an extremely desirable and, above all, undervalued investment that will be enjoyed for generations to come.
