smart spending

Diamond-buying tips from the pros

Engagement ring
Highlights
  • Three factors determine a diamond's value -- the four 'Cs', rarity and durability.
  • Man-made synthetic diamonds have the same properties as natural diamonds.
  • Canadian diamond sellers position their stones as the only conflict-free diamond.

Buying diamonds made simple

Diamonds may be a girl's best friend, but with the dizzying array of natural diamond types, synthetic diamonds and convincing costume-jewelry fakes on the market today, how does a smart shopper choose?

Natural versus lab-grown, crystal-clear or colored -- even cubic zirconia is getting some respect. The choices are vast, and there's likely a stone for nearly any buyer with any budget. The one thing you can do wrong is head down to the jewelry store with no plan.

So, whether you have your sights set on a wedding or just some bling, get started on your hunt with our special diamond-buyer's guide.

Tips on diamonds

Traditional diamonds still a perfect choice

This is the diamond Marilyn Monroe sang about -- the natural stone created in the earth's crust over millions of years. The round, or "brilliant" cut, remains the most popular. "Two out of every three people who buy a diamond in the world buy a round," says Fred Cuellar, founder and president of stone processor Diamond Cutters International in Houston, and author of "How to Buy a Diamond."

Benefits: It's the real deal. Three factors determine a diamond's value, Cuellar says. "Beauty -- that encompasses all the four 'Cs' (cut, color, clarity, carat) -- rarity and durability," he says. Only a natural diamond meets all these standards. A carat is a unit of weight for precious stones, equal to 200 milligrams.

Considerations: Money. Only one out of every 50 diamonds sold in 2010 is likely to appreciate in value, says Cuellar. Prices for rounds of this quality range from $3,400 to $28,000 a carat, according to the Rapaport Diamond Report.

"The No. 1 complaint a woman has about her diamond is sparkle," says Cuellar. His top tip: Ask for a "vivid" white diamond -- the industry's term for the most sparkling and thus most valuable diamonds.

How to spot good colored diamonds

White or "colorless" diamonds are the most desired, yet colored or "fancy" diamonds can fetch higher prices -- or be nearly worthless. Here's a rundown of what to expect with colored diamonds.
  • Reds and pinks: The rarest of colors, these diamonds get their ruby hues thanks to an irregular atomic structure. "When the spectrum of light enters it, it's actually exciting certain electrons in the stone to different wavelengths, making it appear red," Cuellar says. In November, British jeweler Laurence Graff paid a record $46 million for a ring featuring a 24.78-carat rare pink diamond.
  • Blues: Colored by trace amounts of boron, blues include the allegedly cursed Hope Diamond and the Blue Heart Diamond, both today held by the Smithsonian Institution in Washington, D.C.
  • Yellow: Nitrogen, usually an unwanted quality in mostly colorless natural diamonds, can create expensive, vivid canary-yellow diamonds.
  • Green: Radiation causes the color, but gemological labs often cannot determine if the radiation was natural or man-made. "The person who has it has something of no value," says Cuellar.
  • Champagne, cognac or chocolate: Skip these newly popular colors, says Cuellar. "You might as well just burn your money," he says.

Synthetic diamonds are a good alternative

Synthetic diamonds have the same properties as natural diamonds, but they're man-made by subjecting seed diamonds or other carbon material to high pressure in a laboratory. Also called "cultured diamonds" or "laboratory grown," the first synthetic diamonds were made in the 1950s by a process later industrialized by General Electric.

Benefits: Cultured diamonds come in the full spectrum of colors and generally cost less than a comparable natural diamond. Of all the colors produced, the labs have perfected fancy grade yellow diamonds and drastically lowered their cost.

"The synthetic yellows are 10 percent of the price (of natural diamonds) and they're breathtaking," says Cuellar.

Considerations: Gemologists distinguish synthetics as "laboratory grown" on grading reports. Because the industry cannot control their production, lab-grown diamonds lack the rarity factor.

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"Synthetics offer no secondary market value," Cuellar says. "It's not going to appreciate. It's going to depreciate."

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