How to Buy a Diamond
Written by Claire Blumenthal
Diamonds, specifically, are what we, as women, dream of all the time. I sat down with Alex Peterfreund of Espeka Diamonds to ask him how to buy a diamond.
The first question is: why do you want to buy a diamond? What is your budget, and what size are you looking at? Do you like it as an investment piece or something for your fortunate wife to put on her finger?
A diamond for investment and a diamond that you will have set are two completely different things.
When buying diamonds for investment, Alex recommends buying one big stone rather than a few small loose stones. If you want to invest in diamonds, you need to know that it is different from buying gold. If you want to buy an ounce of gold instead of a kilo, the price is 10 times higher. But when buying diamonds, you need to look at cut, clarity, rarity, etc.
When buying for investment, look at the shape of the stone- buy round cut diamonds versus a trendier cut like Emerald cut. Look at what is most tradable. Or even better, buy raw diamonds so anyone who buys them from you can do what they want with them. We want the best return on investment, of course.
Stones that are certified by GIA (Gemological Institute of America) are stones that are accepted worldwide. We all want to be on the lookout for blood diamonds, right? Well, sorry to burst your bubble, but once a diamond is polished, there is no way to trace it to see which country or mine it came from. The only way to find such information is from manufacturers that sell raw diamonds from South Africa, Russia, etc.
Most of the diamonds in the world are mined by big companies like Alrosa, a Russian state-owned company; De Beers, which mines in Africa; and others in Australia and Canada. “Outside Diamonds” are uncertified diamonds without the Kimberley Certificate, which is meant to trace a diamond's origin. No diamonds without this certificate can pass customs at any diamond center in the world.
So, let’s recap: If buying a diamond for investment, it must be certified by the GIA, be round-cut or raw, and have good cut and clarity.
A jeweler is not a diamond expert. They are just salespeople, buy from a manufacturer or dealer.
Now, buying for the sake of buying something pretty: Alex tells us to buy what you like. A piece with ten small diamonds in it is practically worth nothing, and it’s not an investment, so choose something you feel is befitting and go from there.
If the stone is big, such as an engagement ring, you should approach a jeweler. They will learn about your budget and what you are looking for, and they will call a diamond dealer to find exactly what you want. The dealer will bring two or three choices for the client to choose.
The average person does not know diamond dealers (although they should), and they will buy from a jeweler who will mark up the price because they have to pay for store rent, displays, and store branding. A diamond bought from a dealer will be significantly less than it would be from Tiffany’s, for example. The diamond is no different, just the box.
Buying from someone like Alex is a different experience from buying from a jeweler. You walk into a jewelry store, and you see the shimmering of the diamonds under the lights, and the gold, silver, and gemstones call your name. But remember, the Jeweler knows not much more than you about what you are looking to buy. Alex, on the other hand, sits down with you, shows you samples, explains the pros and cons, and gives you a price. Are you expected to buy at that moment? No, Alex tells you to go check out the jewelry stores. See what they are offering and at what price. Ninety-five percent go back to Alex’s office to buy the diamonds with a better price tag and quality from someone who knows rather than buy from someone who knows how to compliment you and tie a neat bow on the box.
Buy from someone you trust. If you bought a diamond today and, two days from now, wanted to resell it to the jeweler, would he give you the price it’s worth, or would he mark it up?
If you have the opportunity to know a diamond dealer and build a relationship with him, it will turn out better for you.
Who is Alex? Why should we trust him?
Alex Peterfreund grew up in Belgium, where his father and grandfather dealt in diamonds. He was not passionate about diamonds, but he was born into the trade. He saw his father cleave to the diamonds in his room when he was only three years old.
Back then, people loved the idea of this job because they had the opportunity to make a lot of money. Alex’s dream was to be a psychologist, but his parents dismissed the idea. He learned all the facets of diamond manufacturing from his grandfather.
He sat in a factory and watched how the diamonds were manufactured. So after gaining all this valuable knowledge, he started out on his own in 1990.
Alex Peterfreund can be reached at +971566503190 for all your diamond needs.