Buying diamond jewelry is a common practice, but buying diamonds and trying to turn a profit isn’t an endeavor most investors undertake.

That’s largely because diamond investing is a little bit tricky, especially for those used to investing in precious or base metals, whose prices move more predictably. Unlike precious metals like gold and silver, diamonds are valued subjectively; there is no simple cost-per-ounce valuation system for them, so investors can be left wondering whether different appraisers will assign their diamond the same value.

Colored diamonds, which are rising in popularity, only complicate that issue.

Connected to valuation is the problem of selling a diamond. Most diamonds are sold through retailers at very high profit margins — in other words, an investor looking to profit from selling a diamond necklace or other jewelry would likely suffer an enormous loss.

Those issues dissuade many investors from getting involved in the diamond space, but they are by no means unsolvable. With that in mind, we’ve put together a brief guide on what investors should know before they buy and sell diamonds and how to get involved in the diamond industry.

This article continues below the Diamond Investing Table of Contents.