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Published in U.S. 1 Newspaper on February 9, 2000. All rights
Diamonds or Dotcom Stocks?
Diamonds may be a girl’s best friend, but they are a
whopping good investment for anybody, says B.J. Tadena, master
diamond cutter and author of "Diamonds: Know What You are Buying
& Selling," ($19.95, Rough Stones Inc., Box 32, New York NY
As an asset, says Tadena, diamonds can be turned into cash at any
time. "Real estate is difficult to liquidate. Cars and automobiles
depreciate from the moment that they leave the dealership. Money is
subject to the various elements that move the economy. But a high
quality diamond bought at the right price will not depreciate and
is not subject to economic change."
Tadena has chapters ranging from the art of cutting a diamond to the
worth of synthetic diamonds, but the real value comes from its 90-page
appendix and its many charts and diagrams, including a page that shows
what different size diamonds look like (so you can eyeball someone’s
new solitaire and guess how many carats it is) and detailed charts
(so you can mentally estimate what it cost).
His consumer tips: Expect to receive a detailed receipt including
the price, tax amount, legal name of the seller, description of the
article, and its composition. In the case of diamonds, the receipt
must also include accurate diamond grading and carat weight
and any treatments, such as "fracture filled," that have been
given to the stone.
The four Cs of diamond shopping are cut, clarity, and color, and
Of the seven major shapes, each has its own charm, but for investment
purposes choose only the 58-facet round brilliant cut — the most
popular and most saleable. Other cuts: The heart shape is the most
difficult to cut; the oval is the least expensive; and the pear or
teardrop is the next least expensive. Other popular cuts are the
(like the shape of a rice grain), emerald (rectangular with more
applied), and the princess (a squarish shape, often used as a center
Invest in a loupe (a special magnifying glass) when inspecting
but use it correctly:
"Hold the loupe one inch away from the left eye (because the left
eye is assumed more powerful than the right). Peer into the loupe
with both eyes open and adjust the distance of the stone to get the
correct focus. Practice focusing first on any item that you want to
see up close — the pores of the skin, a strand of hair, or a glass
marble. Rotate the item slowly. Hold the loupe at varying distances
until focusing becomes easy. When you become comfortable with the
loupe, you are now ready to focus on the diamond or gemstone."
Even with a loupe you will not be able to detect the first three
on the clarity scale: Internally Flawless (IF) or Very Very Slight
Inclusions (VVS1 and VVS2), minute inclusions detectable only through
a binocular microscope. A practiced loupe user may be able to detect
the next grade, Very Slight Inclusions (VS1 and VS2), minor inclusions
ranging from difficult to somewhat easy to see face up, under 10X
magnification. The next grades, Slight Inclusions (S11 and S12) are
noticeable inclusions that are easy to see under 10X magnification.
Some sample prices: a round cut diamond, 1 to 1.49 carats, could cost
as little as $2,500 (with a clarity grade of SI12 for inclusions very
easy to see under the naked eye and the least desirable color grade,
M, for faint yellow) and as much as $16,400 (for a clarity grade of
IF, internally flawless, and a color grade of D, for colorless).
Buy what you can afford for jewelry, says Tadena, but for investment
purposes buy a round cut diamond that is at least one carat in size,
of such clarity that imperfections cannot be seen by the naked eye,
and with a color grade of H (near colorless) or higher. His price
guide would put that diamond at about $6,000.
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