Basic Facts you Need to Know While Investing in Colored Diamonds

Diamond Engagement Rings
Yellow Diamond Engagement Ring

Diamonds are becoming a great means of investment because of the huge value they possess all across the world. Many people are now buying diamonds as a savings. Investing in diamonds includes a lot of pros and cons. The main advantages of this savings method are the durability, portability, inflation-proof and expected increase in demands. The problems include lack of tradability, lack of price transparency etc.

When thinking about buying diamonds as an investment, most people consider classic colorless diamonds. However, apart from this traditional option, you have an enormous number of other options including the colored diamonds. The popularity of colored diamonds is increasing like never before. Hence, they are also becoming a great choice for investment. Through this article, we are analyzing the possibilities of using colored diamonds as an investment method.

Investment Grade Diamonds

When thinking about an investment option, most people will be looking for something that will involve less risk and has great potential to provide good earnings. In this sense, the colored diamonds becomes a better option as they are very rare and has a high value in the diamond market. It is very difficult to find out the colored diamonds with all the desired qualities when considering the fact that only 0.01% (i.e. 1 of 10,000 diamonds) of the total diamonds are naturally colored diamonds.

The popularity of colored diamonds are also increasing significantly as a large number of celebrities are appearing wearing colored diamonds. Hence, they will definitely improve their status in the future and will become something that a lot of people will be seeking out.

Another advantage of colored diamonds is that, unlike colorless diamonds that will be available in a wide range of carat weights and shapes, a colored diamond with the desired color, carat weight and shape can be difficult to find at any given time. This fact also helped to increase the value of colored diamonds to a great extent.

Choosing Colored Diamonds for Investment

If you choose colored diamonds as an investment, the first thing you have to consider is your budget. You can decide whether you should buy five diamonds each worth $5000, or a single diamond worth $25,000 within this budget.


Colored diamonds are rare, but if we need to split them based on the rarity levels, it will be as follows:

  • Relatively common colored diamonds – This category includes Greys, Browns and Fancy Yellows.
  • Mid-level colored diamonds – Vivid and intense yellow along with some color combinations of orange diamonds
  • High priced and rare colored diamonds – The colors included in this class are Pure Orange, Purple, Greens, Pinks and Blues.
  • Red Diamonds – Those who have a level of their own.

It is important to note that even though we said fancy yellow diamonds are relatively common, there is nothing cheap or common about a yellow diamond engagement ring that has a 10-carat yellow diamond with VS clarity.

Another important color that is very rare is the black diamond. Buying black diamond engagement rings can also be a wonderful asset for you, as this color is specifically sought out by a lot of people.

Also, note that this classification is very general and there will be hundreds of colored diamonds that are made with the combination of these base colors and each of them will be treated differently.

Guidelines for Investing in Colored Diamonds

When selecting colored diamonds as an investment, you have to be very careful, as even a small mistake can lead to a significant reduction in the value of your diamond. You have to make sure that the diamonds you buy are worth the money you are spending. There are some key factors you have to evaluate before buying diamonds. They include:

GIA Certificate

Make sure that your diamonds have a GIA certificate, as this is the only way for you to know what you are buying. Also, when you sell your diamonds, your buyer will want to see it as well.


If you are planning to buy yellow diamonds, make sure that they exhibit good fluorescence. However, it is not important for other colored diamonds.


It is recommended for investment diamonds to have good clarity. Low clarity diamonds will be harder to sell. Therefore, ensure that the diamonds you buy has a good clarity grade.

Diamond Cut

Cut refers to the quality of the polish of a diamond. Colored diamonds will be cut in a way to enhance their color. Hence, before buying a diamond, make sure that the cut brings out the color of the stone effectively.

Diamond Shape

It is better to go for common shapes including round, princess, oval, cushion cut, pear-shaped, marquise, and heart-shaped diamonds. Avoid buying irregular shapes like triangular or kite, etc.

Carat Weight

The price of a diamond goes up with the increase in carat weight. Hence, it is better for you to select a diamond that fits your budget.


The value of a diamond will increase with the increase in its color intensity. Hence the stronger is the color, the better it is for the investment.

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