So you’ve decided you want to invest in diamonds. Whether it’s because you recently watched a spy movie and thought it would be cool, or you’ve done some research and found the worth of diamonds to be exciting, there are factors you should take into account before spending your hard earned money on something that will take time to reap the benefits from. The safer bet might be to invest in a diamond mine. If you’re still dead set on buying actual stones, ensure you do these next five things.
- You Only Make Money When You Sell
This sounds obvious, but there is a little more to it than that. Just like stocks, diamonds need to be bought for under retail, and sold for profit. Diamonds are a supply and demand product. When the mines are dwindling and not many stones are being found, the price can soar. Conversely, when the mines are doing well, the price of diamonds can plummet. You’ll have to keep an eye on trade and see exactly when the price will be best for you to sell your investment.
- Get Professional Help
Unless you’re a diamond expert and a whiz at business, you will need to bring a professional onto your investment team. You need someone who can tell the quality of the diamonds, and who has contacts you can be put in touch with. Every diamond is different. There are people who are highly trained in this field. Of course, this will add cost to your investment, as these people don’t work for free.
- Beware of Frauds
As with any high end industry, the amount of fakes is far more prevalent than genuine products. These people thrive on taking advantage of those who don’t know any better. Every diamond that you seek to buy should be scrutinized by a professional appraiser. You should be able to search for the company and find them online. Things like James Allen reviews or other websites should have that seller’s name on them.
Red flags that tell you you shouldn’t even waste your time would include the person using general terms such as “investment quality” or “high grade.” Unless the seller is using industry jargon, you can be reasonably certain they are attempting to take advantage of you.
- Taxes
Uncle Sam is still going to want his cut. Capital gains taxes will apply to every transaction you make. Be sure to get yourself an accountant who specializes in this sort of investment venture. You want an expert. Budget for this.
- Diamonds Are Not Cash
You can’t walk into a store and pay for your groceries with diamonds. You need to have a way to get cash while you’re still looking for a buyer. Whether that be keeping your job or other investments, don’t count on the money from your diamonds any time soon. This is a long term investment for the future. Think of it as money to be spent during retirement, then you’ll never miss the actual cash.
No Comments