The 4 C’s + 1: Determining Diamond Quality
Confucius once said, “Better a diamond with a flaw than a pebble without.” Although this might be true, I don’t think anyone starts out wanting a flawed diamond. But what determines the value of a diamond? Maybe you have seen a diamond ring and thought that it looked perfect. Maybe you saw a diamond that would have been better off as a pebble. Unfortunately, calculating the value of a diamond isn’t defined by all the “oohs” and “ahs” received from a diamond engagement ring. There is an actual science to examining and evaluating these precious stones. To make it a bit simpler, a diamond’s quality is determined by the 4 C’s: Carat, Cut, Color, Clarity, and the secret 5th C Certification. Each “C” is analyzed separately to determine the overall value of a diamond.
Let’s start with Carat. A diamond’s weight is measured in carats and points, think of it like dollars and cents. A carat is divided into 100 points just like a dollar is divided into 100 cents. So, if a diamond is 1 carat, it is 100 points – easy to remember, right?
Diamond images are for reference only and may vary based on screen size.
Sometimes when it comes to diamonds, there is a misconception that bigger is better. That is not necessarily the case. Diamond carat weight can carry a premium based on different size groupings. These can be generally categorized into oversize and regular.
For example, let’s use a stone that weighs 1.49 carats: Now this would trade according to a 1.3 carat price listing but it is actually closer to 1.5. Since It is so close to 1.50 carats it trades at a premium versus the 1.3 carat listings but at a steep discount versus the 1.50 carat listings. This difference can be 20% in value over 1 point in weight. One way you can lose value is if you buy a diamond that is close to a border like 1.5/1.49 and you chip it. If the chip is in the wrong place, it may need a recut and can lose upwards of 20-40% of its of value.
Quick Fact: How did the Carat System Start?
According to the GIA, the modern carat system that we use today started with the carob seed. Early gem traders used the small, uniform seeds as counterweights in their balance scales. Today, instead of using the seed, carat system uses the gram weight around the world.
Cut can be ‘cut’ into two categories: Shape and Cut Grade. Shape is by far the easiest of the 4 C’s to recognize as even toddlers can tell squares and circles apart. Below are the most popular diamond shapes:
Diamond images are for reference only and may vary based on screen size.
The nuance comes when you look into the second half of Cut which is the “Cut Grade”. Let’s take drawing a circle as an example. As you may know, it’s easy to draw a circle but to draw a perfect circle is incredibly difficult. Imagine that the cut grade is a score for how perfect the circle is or in the case of a diamond how beautiful it is from a scientific standpoint.
The cut of a diamond deals with a diamonds proportions and is quite difficult to perfect. It can take master cutters years to perfect their craft. The cut significantly affects its appearance or the way it “sparkles”.
Cutting a diamond too shallow and the light will go out the bottom. If you cut it too deep, light will exit the sides of the diamond. Cut proportionally, light is returned out the top of the diamond. This proportional cut is the optimal cut a diamond can have and what truly makes it glisten. The proportional cuts are premium and therefore more valuable and expensive.
Color is one of the 4 C’s affecting the value of a diamond. The color of a diamond, or lack thereof, is important in determining a diamond’s quality. The scale goes from “D” to “Z” with “D” being colorless and “Z” being light yellow.
Diamond images are for reference only, and real color may vary.
So, if a diamond lies on the scale between “D” and “Z”, you want it to be as colorless as possible. On this scale, “D,” “E,” and “F” are colorless. Letters “G” through “J” are almost colorless.
- Colors with faint yellow range from “K” to “M”.
- Very light yellow is seen in diamonds ranging from “N” to “R”.
- Lastly diamonds on the scale from “S” to “Z” will have a light yellow color.
If a diamond has a strong color, it may qualify as a “Fancy” colored diamond, which can be actually quite valuable and incredibly rare (and graded on a separate scale.) The scale goes from Faint to Fancy Deep.
For example, a stone could be Faint Pink, Fancy Light Pink, Fancy pink and so on until Fancy Deep Pink. Fancy colored diamonds can be yellow, red, pink, green or blue. Red diamonds are the rarest of the diamonds and thus are the most valuable and expensive, with stones as small as one carat being worth millions. The more color a diamond has on this scale, the more valuable, as this will create a more vivid diamond. There are more factors that contribute to color including tinges and fluorescence that deeply affect the price of a given stone.
Another way to measure a diamond’s value is by looking at its clarity. Clarity measures the number of impurities and flaws, termed ‘inclusions’, within a diamond. Determining a diamond’s clarity requires a gemologist to examine it under 10x magnification. As with color, clarity is also measured on a graded scale.
Diamond images are for reference only, and real inclusions may vary.
The grade includes flawless (FL) or internally flawless (IF), Very very slightly included (VVS1,VVS2) and, very slightly included (VS1,VS2), slightly included (SI1,SI2) and then included (I1,I2,I3).
- FL/IF or flawless or internally flawless diamonds have no external or internal flaws. These diamonds have the highest level of clarity and are incredibly rare. If you have flaws on the outside of the diamond, such as a indented natural inclusion, it would be deemed “Internally Flawless”. These diamonds are hard to come by with only a handful of them in any given color, size, and shape combination available.
- VVS1 and VVS2 are very, very slightly included. At this level of clarity, it is very difficult for a trained eye to see impurities under a 10x magnification and may warrant 30x magnification for the average person to see any imperfections.
- With VS1 and VS2 , imperfections are difficult to see under 10x magnification. These are valuable diamonds but less valuable than the VVS graded diamonds.
- The next grade are slightly included (SI1/2) diamonds. In this grade, impurities are visible with 10x magnification and possibly with the naked eye.
- I1 grade diamonds are included diamonds meaning inclusions are more than likely seen by the naked eye and apparent under 10x magnification.
- I2 and I3 is the lowest grade of diamond clarity. These diamonds are included and imperfections are obvious. These diamonds barely made the cut, had they been slightly worse they would have been crushed and used for industrial purposes, such as diamond tipped drills. Because some of these diamonds only show imperfections through 10x magnification, have largely white inclusions, or have imperfections you can hide under a prong, they can be great options to buy.
Now that we have covered the 4 C’s of determining diamond quality, what could the last one possibly be? The secret 5th C added to the 4 C’s of determining diamond quality is the certificate. Certificates are created by gemologists and include a detailed analysis of the diamond including its diamond shape, weight, clarity, color, measurements, basically more information than you would ever possibly want to know.
These certificates show that the diamonds have gone through professional inspection and that you can trust the grade assigned to it. They are very helpful in determining the value of the diamond.
When looking at the certificate, there are four main players in the market: GIA, EGL (US and International), IGI, and AGS. Each has its own opinion on a diamond’s grade but it is the consensus in the diamond community that GIA is king and its grading is law.
So those are the 4 C’s: Carat, Cut, Color, Clarity, and the secret 5th C Certification. Now that we have reviewed the 4 C’s that determine diamond quality, hopefully you have a better understanding of what makes a diamond valuable. The process is clearly quite intricate but that is what makes diamonds so special. Although knowing these facts will not make you an expert, at least now you know the science behind what makes a diamond glisten and what makes it valuable. So whether or not you agree with Confucius, at least now you know what makes a diamond flawed or perfect!
Vasco Assets believes that a knowledgeable consumer is a better consumer. We are proud to present the straight-talk about luxury commodity assets of all types, including diamonds. If you have any questions or would like more information about anything you’ve read, please reach out to us.
About Vasco Assets:
Vasco Assets is a private licensed, fully insured, and bonded financial firm with business interests worldwide, specializing in luxury commodity assets. Located in Newport Beach, CA, Vasco Assets provides Financial Flexibility and Security by buying and lending against luxury assets, unlocking the inherent value and converting the assets to funds, offering a variety of innovative collateral loan programs to both individuals and businesses. Vasco also provides Access to Luxury by making luxury available to their clients well below wholesale and manufacturing by virtue of diamond production in India and Israel, jewelry manufacturing in Los Angeles and worldwide networks. Vasco offers programs to Build and Maintain Wealth, through diamond commodity investment programs, taking advantage of the hedge opportunities inherent in commodities. By virtue of their diamond production, these investment grade stones are offered at commodity pricing, eliminating the mark-ups of wholesale and retail pricing.
For more information or to inquire about any of Vasco Assets’ high-value services, please call 855.285.7059 or email email@example.com