By Allison Tait, ninemsn Finance
Getting married soon? Choose your diamond carefully. In some cases, a diamond can be a better long-term investment than marriage itself, while in others, it's all about the bling.
It's a woman's prerogative to pop the question any day in a leap year, though tradition dictates it happen on February's extra day. If you're planning a stealthy proposal, however, you need to give some serious thought to the rock.
Experts are divided as to who pays for the ring when the woman proposes, but all agree that there are four things to look for when choosing a diamond. Perhaps you've heard of the four Cs of choosing diamonds carat, clarity, colour and cut? The question is, can an untrained eye tell one gorgeous bit of bling from another?
"Yes," says Robyn Ellison, communications manager at Rio Tinto Diamonds. "Empowered with a relatively small amount of information, an amateur will be able to discern differences in diamonds and be better equipped when making a purchasing decision."
In order to fast-track your knowledge, here's a quick guide to the four Cs.
Cut: The way a craftsman cuts and polishes the stone adds to the value of the stone. The ideal is a cut that highlights the brilliance and fire of the diamond.
Colour: Most diamonds appear colourless, but often contain trace elements that give them a slight tinge of yellow or brown. D-colour diamonds are the most valuable in the white range. Diamonds also come in a range of colours, such as vivid pinks, blues, yellows, green and more. Coloured diamonds account for most of the world's most valuable diamonds.
Clarity: The more blemishes, the less the shine. Clarity measures the flaws within a natural stone like a diamond.
Carat: One carat equals 0.2 grams. "The price of a diamond does not increase linearly with weight," says Ellison. "The most notable price increase happens once a diamond weighs one carat, where you can pay a gob-smackingly higher price for an equivalent diamond quality that weighs 0.95 carats."
Are diamonds a girl's best investment?
A simple half-carat or one-carat white diamond might be just the thing to make the girls in the office green with envy, but it doesn't cut the mustard at investment level.
Diamond producer DeBeers may have managed to sell the world on its "two months salary" rule of thumb for engagement rings but to the connoisseur the best diamond is a natural fancy-coloured diamond.
In October 2007, a 6.04 emerald-cut blue diamond went under the hammer at a Sotheby's auction in Hong Kong. It sold for US$7.98 million, the most expensive gemstone per carat ever bought at auction. At US$1.32 million per carat, it beat the record of $926,000 per carat set by the Hancock Red diamond in New York 20 years ago.
In Australia, the pink diamonds produced at Rio Tinto's Argyle mine are so highly valued that the 40-60 best stones each year are put out to tender.
"This is a very rare product," says Jean-Marc Lieberherr, General Manager, Rio Tinto Diamonds. "It takes a year to accumulate 50 to 60 stones out of the 600 million stones produced by Argyle each year. Each stone showcased at the tender is a very special prize."
No matter what colour you choose, you can count on getting a much smaller diamond for your dollar than if you spent the same amount on a white diamond. A half-carat pink diamond, for instance, will fetch in excess of $100,000, yet you can buy a fine white diamond for around $5000.
Yet in some cases, your investment in colour can pay off handsomely. Pink diamonds, for example, are running out. Rio Tinto recently committed $1 billion to expanding the Argyle mine, shifting to more expensive underground mining, but even this has only extended its life until around 2018. After that, the supply of Argyle pinks will cease. Given that pinks already enjoy a high appreciation rate of around 20 percent a year, it has to be assumed that the sky may well be the limit once the Argyle mine closes.
So are coloured diamonds a brilliant investment option?
"As with art, precious stones are typically purchased for reasons beyond a return on investment," says a spokesperson for Citi Private Bank. "There are many other investment vehicles or asset classes that give higher or more profitable returns than art or precious stones. Also, such niche assets are relatively illiquid, so it is not something we would recommend to clients seeking reliable investment returns and liquidity."
The comparison between art and coloured diamonds is one that comes up regularly. Quek Chin Yeow, head of Jewellery Asia at Sotheby's, described the recent purchase of the blue diamond as "as rare as getting a Renoir or a wonderful Rothko".
When it comes to buying your diamond, two things are certain: you need to shop around and you must buy from a reputable jeweller who can guarantee authenticity.
"Today there are diamonds for every budget," says Ellison. "What is important is that you buy well. Be prepared to shop around to establish relative values."
It's also worth considering the source of your diamond. Ellison recommends asking where your diamond comes from and only dealing with jewellers who can provide a guarantee that their diamonds are from sources free of conflict (for more information, visit www.diamondfacts.org).
And now for that proposal…
Experts suggest women who intend to propose remember three things.
- You are not alone: nine percent of all proposals are from women to men (and 80 percent of men say yes).
- It's a good idea to make sure the answer will be yes. Few relationships survive a declined proposal.
- Don't get down on one knee, especially if you're wearing high heels. This position is rarely flattering to a woman.
Remember that if he knocks you back, tradition demands he does so with a kiss and a silk gown. Wear it with your diamond remodelled into a glamorous pendant, of course.
Need help with your wedding budget planning? Check out our wedding budget planner