Do your homework, diamond shoppers

June 10, 1994|By Andrew Leckey | Andrew Leckey,Tribune Media Services

In the spring, young couples' thoughts turn to diamond engagement rings. Beyond the obvious romance, knowing what you're buying is an important consideration.

The average amount spent on an engagement ring is around $1,600, a 12 percent increase from a year ago, according to the Diamond Information Center. More than 1.6 million of them will be bought in this country in 1994, proof that romantic and financial commitment still go hand in hand.

Shaking off a recessionary slump, the diamond industry has lately enjoyed a period of strong sales in this country. There also are more places to buy diamonds than ever before, with traditional jewelry dealers and auctions joined by specialty retailers, wholesalers and even cable shopping channels.

All this diversity means it's more important to be aware of the level of quality you're buying and whether you're paying a fair price. You must do your homework on diamonds.

There's always controversy about claims of low prices. Most recently, Home Shopping Club, based in St. Petersburg, Fla., in May agreed to base its gemstone jewelry price comparisons on qualified independent appraisals of several samples of what it is selling on television. This was part of an agreement to pay $75,000 in legal costs, without admitting to any violation of law, to the New York attorney general's office in response to its accusations of deceptive reference pricing.

Apart from not paying more than necessary, understand some additional concerns.

"Keep in mind when shopping that it's possible to temporarily alter the color of a diamond in a variety of ways, and that some cracks in stones can be filled with a glass-like substance you can't detect with the human eye," warned Antoinette Matlins, co-author of "Engagement and Wedding Rings: The Definitive Buying Guide for People in Love" (GemStone Press, South Woodstock, Vt., 1990).

So buy a diamond that's accompanied by a report from the Gemological Institute of America, or pay to have the diamond submitted for a report, she said. The GIA and American Gem Society both grade diamonds on quality and give certification to jewelers who pass a course in gemology. A typical rate for an appraiser is $50 to $150, depending on the complexity of work performed and degree of expertise required.

Criteria for diamond quality consists of the following "Four C's": cut (angles and proportions calculated to produce brilliance); carat weight (a carat equals 100 milligrams); clarity (the fewer flaws, the better); and color (with emphasis upon the "whitest" diamonds with the least color). However, other factors such as the changing fashion of certain cuts and rarity of some sizes and colors must be considered.

It's a good idea to examine a diamond outside of its setting, since the mounting can hide imperfections or create an impression that differs from reality. The vast majority of stones sold are round, followed by the marquis shape (elliptical with pointed ends). Rounding out the list are pear-shaped, emerald, oval, and heart-shaped diamonds.

"Determine your budget in advance and get the best diamond to fit your budget, with the groom well aware of what diamond his fiancee actually prefers," advised Aline Delia, spokeswoman with the Diamond Information Center in New York. "A general rule of thumb is that the value of the engagement ring should be equal to two months' salary."

Diamonds are a worldwide market. Although demand has declined in nations such as Japan because of economic woes, other developing Asian countries are more than picking up the slack.

"Diamond jewelry sales hit a high in 1989, but 1990 and 1991 were difficult recession years for the industry, before it began a comeback," noted Lloyd Jaffe, chairman of the American Diamond Industry Association, the umbrella organization for three diamond associations. "The nature of the world's economies have considerable impact on the production and price of diamonds."

Twenty countries supply or produce diamonds, the biggest producers being Australia (mostly supplying cheaper diamonds), Botswana, Russia, South Africa, Zaire and Namibia. While this is expected to be a good year, there are concerns about political developments in Russia and South Africa, as well as civil strife in Angola and Zaire.

"Wholesale diamond prices have been fairly stable the past year, with no huge price drop tied to any unloading of diamonds by the Russians, as some had predicted," said Joseph Schlussel, publisher of the Diamond Registry Bulletin.

There can be volatility in diamond prices, which is why most experts refuse to call them an investment.

A one-carat flawless diamond cost $1,600 in 1972, then rose to $60,000 by 1979 because investors saw diamonds as an inflation hedge.

Soon afterward, inflated prices plummeted, that one-carat stone falling to $12,000 in 1985. Prices gradually revived, rising to $15,500 for the same stone by 1990. Following some recessionary slippage, that diamond has lately been around $13,750.

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