Buying diamonds: exclusives or commercials?

16 Jul 21

Would you like to invest in diamonds? A good decision to make, according to our blog post about investment diamonds in 2018. Only: where do you start? A quick search on the internet will land you at auction houses such as Sotheby’s, where diamonds are sold for exuberant prices. Should you end your search here, with a significant budget to spend, or should you look for other high quality diamonds at more affordable prices? We broach this subject with Steven Boelens, executive director at BNT Diamonds.

The resale of ‘exclusives’ at an attractive price takes time, but we are certain that their return on investment will only increase in the coming years.
‘Commercials’ are easier to trade and at lower prices as well, which is why they are most often purchased and sold.
The quality of a diamond is determined by the 4 C’s: Colour, Carat, Clarity and Cut.
It is better to consult a specialist when purchasing or selling diamonds.
At BNT Diamonds, we offer our diamonds at very competitive prices. Because of our business model and our policy to purchase at the source, we can guarantee our clients the lowest prices.

Dazzling diamonds and prices

From time to time you can read about them in the news: stunning diamonds that are sold at record prices. In 2016, for example, the De Beers Millennium Jewel 4 was sold for approximately 28 million euros. It is an oval diamond of ‘fancy vivid blue’ quality with one of the rarest and most sought-after tints of blue. Another example, The Blue Moon, generated 45 million euros when it was sold in Geneva in 2015. A last example: in 2018 one of the largest diamonds in the world will be sold in Antwerp. Larger than a golf ball, with a carat weight of 910, this diamond will be sold for 32 million euros. It was found in January of this year in the South African country of Lesotho.

‘Exclusives’, and rightly so

“Such rare and expensive diamonds are called ‘exclusives’, and rightly so”, says Steven Boelens, executive director at BNT Diamonds. “They are precious stones with very intense colours, or for lack thereof, an exceptional clarity, astonishing size and/or an extraordinary cut shape. The exceptional colours of these diamonds can range from hues of blue, orange, pink and red to – particularly popular but not as rare – yellow or brown. The most intense colours are called ‘fancy’.”

In search of the price

“For the people who wish to purchase or sell ‘exclusives’: you cannot find a price list for these stones”, explains Steven. “To get a general idea of what the value of a certain exclusive diamond would be, you could calculate the average selling prices of similar diamonds, generated during five recent auctions. The result will be quite close to the price point you can expect. If, however, the diamonds is bought by a collector who wishes to complete his or her collection, the price could increase greatly.

But no certainty

‘Exclusives’ can rise in price significantly over the years. The value of certain intense yellow diamonds, for example, has increased tenfold in the past two decennia. In 2014, the Graff vivid yellow was auctioned for 11, 88 million euros. This precious stone is with a carat weight of 100, 09 one of the largest yellow diamonds in the world. If your family jewels contain a vivid yellow diamond of this size, you are set for life.

Steven Boelens says: “certainty regarding the return on investment of ‘exclusives’ is nonetheless impossible. Their price may not increase as quickly as the price of other diamonds, which we will talk about shortly, too. Moreover, the options for resale are limited. It thus takes a little more time to sell ‘exclusives’ at an attractive price. However, I personally am convinced that the return on investment of these diamonds will keep increasing the coming years. The number of billionaires all over the world is growing, along with their interest in diamonds.”

More accessible: commercials

‘Exclusives’ may make headlines, but it is not these diamonds that represent the lion’s share of the worldwide trade. The bulk of diamonds are the so-called ‘commercials’. “The most traded ‘commercials’ have an F and G colour grade. We will elaborate on this shortly, but for now it is enough to remember that this colour grade results in an almost colourless diamond. Clarity-wise, an expert might see imperfections in a VS1-VS2 diamond when it is magnified ten times. An individual, on the other hand, will not notice this. To us, with the naked eye, the diamonds looks perfect. Thus, these findings do not make the diamond less attractive as an investment.”

Diamond quality according to the 4 C’s

The quality of a diamond is determined by the 4 C’s: Colour, Carat, Clarity and Cut. “’Commercials’ are between white and yellowish”, Steven Boelens at BNT Diamonds explains. “The colour is graded from D to Z, with D being completely colourless. Even an expert will not be able to find any colour or yellowish tint within this diamond. This colour grade is the most sought-after, but also very rare. As we move towards Z, the diamonds have a more and more yellowish colour hue to them.”

The second quality criterion of a diamond is clarity. “To determine the clarity, a specialist will look for so-called inclusions. As you may know, a diamond is formed between 140 and 190 km deep inside the earth, as a result of compressed carbon. During this formation, but also when polishing and wearing your diamond, inclusions can arise. Clarity grades range from loupe clean to piqué: with a lot of imperfections. The less inclusions a diamond has, the clearer, rarer and the more valuable it will be. Inclusions are deemed non-existent if they are not visible when the diamond is magnified tenfold using a loupe or microscope.”

The third parameter is carat, used to denote the size or the weight of a precious stone. 1.00 carat equals 0.2 grams and corresponds with 100 points. Carat weight is usually rounded to two decimal places.

Lastly, we have cut quality, which specifies the proportions, symmetry and polish of a diamond. A well-cut stone will reflect almost all the light through the crown, resulting in a diamond’s characteristic radiance. Through this link, you can read more regarding the 4 C’s and how they influence the value of a diamond.

Again in search of the price

How can you find a ‘commercial’ for a correct price? “Again, there are no price charts for these investment diamonds, something you can find when investing in gold. However, with just half an hour of perusing the worldwide web, you will be able to find a lot of information. Literally thousands of diamonds are sold and bought online, by people all over the world. Take a look around and you will quickly gain a general idea of the average price at which a diamond can be sold or bought, within the category of your choice.

Buying diamonds: rely on a specialist

In order to be certain you pay the correct price for the diamond quality you have chosen, it is best to seek assistance from a specialist, for example BNT Diamonds. “Of course, there are numerous other diamond traders on the market, such as Harry Winston and Tiffany’s. However, they tend to take rather large profit margins, sometimes up to five times the purchasing price. We sell our diamonds with much lower margins and have thus opened up the diamond market to a much wider public. Our prices are very competitive, too, as we are able to purchase our diamonds at the source. At the same time, our clients can be assured of the quality of our products. With every diamond starting from 0.30 ct, we include a diamond certificate of GIA, IGI or HRD. On this certificate, you will find a short description of the 4 C’s, as evaluated by one of these reputable laboratories. Nowadays, the certificate number found on the laboratory’s website is lasered into most diamonds as well. This gives you a hundred percent certainty.”

And how to tackle resale?

“’Commercials are relatively easy to resell, especially compared to ‘exclusives’. On eBay, for example, various PowerSellers are active, purchasing and selling diamonds in large quantities. Of course, you need to be certain you can trust the buyer. Be sure to check reviews first. But still, your safest bet is to sell your diamonds to a specialist. When trading in ‘commercials’, the majority prefers to keep the diamond for about five years before reselling. To determine the potential selling price you can ask, we will appraise your diamond. The resulting estimation will correspond with the price at which we can presently purchase that diamond at the source. With ‘commercials’, we will increase this price with five percent. We are sure that this amount, even with five percent potential return on investment, will still result in a favourable price for potential buyers.”

Are you confident you wish to invest in diamonds? Whether you choose ‘commercials’ or ‘exclusives’, the BNT Diamonds specialist are here to help you with professional advice, quality assurance and a competitive purchase price. With as little as € 5.000 you can purchase a relatively easy to sell ‘commercial’. In your search for ‘exclusives’, too, we would be happy to assist you.

About Fabienne Rauw

BNT Diamonds Antwerp

Fabienne, manager of the German market is able to guide every client with finding the right jewel. She takes care of most of the German orders, but also takes other task on her plate. Thanks to her six years of experience at BNT Diamonds she acquainted well with the product and the marketing around it. Her degree in PR ensures that BNT Diamonds is well presented across all media channels. For anyone looking into a new investment opportunity, Fabienne is the perfect guide in this process. No question will be left unanswered, and she will help you every step of the way.

With this article, BNT Diamonds strives to inform you thoroughly about investing in diamonds. No investment can be guaranteed to be without risk or fully according to your expectations. That is why we recommend to research the risks and aspects of investing in diamond properly to ensure that you make the right choice for your portfolio.