Tuesday, October 21, 2008

Diamond values in times like these...

It should come as no surprise that I’m often asked about the future of diamonds, particularly as an “investment”. Of course, I’ll always believe that diamonds have superlative physical and extensive emotional value.

In economic terms, the markets that are waxing and waning as we speak are staffed by fully-licensed brokers and speculators, who have training and accreditation to buy and sell all sorts of financial vehicles (read: paper assets) depending on a myriad of signals and indicators.

Diamond sellers are typically not qualified or well-versed enough in these matters. Unfortunately, some jewelers still promote diamonds as an investment. In my humble opinion, this is a no-no.

I am the Diamond Wizard, but alas I’m not clairvoyant. Who is? Unlike many know-it-all and I-told-you-so pundits these days, I do not even pretend to portend the future. But, I can tell you what my Mamma told me with great certainty… “There’ll be days like this”.

And, there have been before. In fact, the classic “boom and bust” business cycle is endemic to commodities in general and minerals specifically. Ore is found, a mine is built, full-scale production ensues, the community thrives, the market gets saturated, demand softens, prices fall, the mine loses “efficiency” and then it closes.

Prices firm up over time, a new mine is found… ad infinitum, or at least until the natural resource is completely exhausted. Sound familiar?

It's precisely why DeBeers was formed. Cecil Rhodes was among the first to recognize that the best way to curtail calamity and disaster in supply and demand was to “cartelize”, “monopolize”, or otherwise control the diamond trade through a “single-channel”.

To make a long story short, it has generally been a boon for consumers with diamond prices and value steadily climbing over the years. The most notable exception was the bust of the speculative bubble in “investment diamonds” in the late 1970’s. In this case, I must note that these were bought and sold as commodities on the strength of their paper (read: certificates) alone.

But, all that is solid does not melt into air!

Indeed, diamonds are the most tangible of assets. Their supply is limited by Mother Nature. They offer immediate allure and continual appeal. They do not deteriorate. They don’t need to be fed, clothed or housed. And, their benefits can easily be passed along for future generations to behold.

Common wisdom tells us that the best tends to hold or increase in value the most, much more so than second best or normal or average or less. And, consumer’s demand for branded diamonds has certainly clarified, reinforced, and solidified the perception of what is best in today’s marketplace.

Friday, October 10, 2008

Frosted versus Polished Girdles

The "girdle" is our trade's terminology for the outside edge of a diamond. If you've ever wondered whether a fine diamond should have a frosted or polished girdle, I would ask... how romantic is it to focus on a girdle? Doesn't personality count for anything these days?

Just kidding, but I have a slight aversion to even using the term girdle, especially when applied to something as gorgeous as the world's most perfectly cut diamonds. It seems so... impolite.

Anyway, my short answer is that faceted girdles and matte-finished girdles are both perfectly appropriate when finishing diamonds.

Diamond cutting, especially at it's highest level, is still an art form. The parameters are extremely narrow at the upper echelons of the diamond quality pyramid, but the precise application of techniques is left up to the cutter to decide. This ensures that each stone will ultimately display its optimum beauty.

Some cutters prefer faceted girdles better, some don't. Some consumers prefer faceted girdles better, some don't. But the truth is that some diamond crystals are more striking with faceted girdles and some aren't.

My own preference is a smooth girdle. My reason is very simple, it concerns face-up appearance. Smooth girdles actually make a diamond round - faceted girdles make a diamond look round. No matter how many facets you put on the circumference it is still pixel-ated.

Either way, the girdle itself should not be visible when the diamond is viewed in the face-up position.

There are other considerations as well.

It can be argued that a frosted girdle imparts "life" to an otherwise cold looking high color diamond. If a diamond has any trace of brown in it, then that matte-finished edge may appear "dirty". And, an off-color diamond with a thick frosted girdle will definitely look darker.

Sometimes a girdle simply must be faceted to prevent slight 'bearding" that may remain despite careful rounding. A downside to a faceted girdle is that it creates a continuous "window" around the diamond that looks like a line. Then again, some customers flat-out prefer the "completely finished" look of a faceted girdle.

From a cutters point of view, I am here to tell you that faceting a girdle is a royal pain in the neck. Think about it, anywhere between 64 and 96 extra itty-bitty little tiny facets have to be cut, polished, aligned and symmetrical... all at no extra cost!!!

What would you do?

And, don't even get me started on culets.

Tuesday, October 7, 2008

Clean Diamonds

No matter what the size, color and clarity of your diamond, and even no matter how well it is cut, it just won't look great if you don't keep it clean.

The reason for this is that the surface of diamonds has an affinity to grease and oil - as in soap, shampoo, body oils and the like. This property actually helps extract diamond from it's ore base in the mining process, but that's another story.

When the surface of the diamond get's dirty it drastically limits its ability to allow light into the stone and to properly reflect light as well. That's not good. So the moral of this story is to keep your diamonds clean!

That doesn't mean you have to spend a part of each day in the jewelry store. I'm an old-fashioned kind of guy who likes to keep things simple, so I'd suggest this recipe for success:

Mix 1 part light detergent – I always liked that bald-headed guy with the earring, Mr. Clean – 1 part ammonia, and 2 parts water. Dip your ring in the solution and brush gently with a tired old toothbrush. Rinse thoroughly with cool clear water. Ta-da.

Do not use abrasives like Comet or Ajax or the Barkeepers Friend. They won't hurt your diamond, which is the hardest substance known to mankind. But they'll wreak havoc on your settings.

Around every six months, I’d suggest you have your ring professionally cleaned at your local jeweler. While you’re there be sure to have the setting checked for any loose diamonds or other normal wear-and-tear. This will keep your diamond safe and secure, ensuring you a lifetime of enjoyment.