Diamond-Buying Tips From the Pros

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.

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% 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.

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

Look Good on a Budget: Simulated Diamonds

Also a man-made product, simulated diamonds look the part but have none of the same properties. The most popular of the fakes is cubic zirconia, a crystalline form of zirconium dioxide that first hit the jewelry market in 1976.

Benefits: While cubic zirconia stones come in colors, they are naturally colorless. Vivid whites cost a fraction of similarly sized natural diamonds. They also weigh 1.75 times more, making the equivalent carat stone feel heavier.

The cut and proportions of a cubic zirconia, measured in millimeters, are also more exact, says Cynthia LoPresti, CEO of BodyJewels.com, a manufacturer and online retailer of hand-cut cubic zirconia. To purchase the equivalent of a 1-carat diamond, ask for a 6.5-millimeter cubic zirconia.

Considerations: Cubic zirconia stones last from one to five years and are not scratch-proof like natural diamonds. They can even fracture or shatter. The cheapest of them are machine-cut, says Cuellar, and sell for 35 cents to a few dollars per carat. To get a quality cubic zirconia, ask for a hand-cut stone.

For the Concerned Shopper, Canadian Diamonds

Canadian diamonds are natural diamonds that are mined in Canada, then laser-inscribed and certified as being of Canadian origin.

Benefits: Canadian diamond sellers position their stones as the only conflict-free diamond because you can trace them from mine to purchase. You've probably heard the term "blood diamond" -- natural diamonds mined in a conflict zone and used to fund civil wars or at the expense of child labor. In 2000, the diamond-producing countries, backed by the United Nations, created the Kimberley Process Certification Scheme to track rough diamonds to ensure their production does not finance conflict. But the industry is still policing itself, so some experts, including Cuellar, say there's no guarantee the natural diamond you're buying is conflict-free.

Consideration: To further ensure the origins of your Canadian diamond, Cuellar suggests that you demand a money-back guarantee that protects you should you discover it's not the real deal.

What to do With Inherited, Antique Diamonds

Antique diamonds are stones in one of the original cuts of diamonds, known as the old mine, old European, cushion, rose and Asscher cuts. These cuts produce diamonds with extremely high crowns, extra weight and low sparkle.

Benefits: Savvy dealers often shop auctions for antique diamonds looking to score one that will yield a beauty when recut to modern proportions. Antique diamonds are 30% to 50% less expensive than modern-cut diamonds and cost $150 per carat to recut.

Considerations: Antiques can lose anywhere from 15% to 50% of their carat weight when recut. If you inherit or purchase an antique stone with flaws, called "inclusions," those tiny faults can result in cracks or a shattered diamond when recut.

"If you're going to ask a cutter to cut it, he has to be willing to insure it during the cutting process. If you can't get insurance for the cutting, don't buy it," says Cuellar, who recently recut a customer's 4.5-carat, old mine-cut diamond down to a 1.8-carat modern cut for $600.

Memorial Diamonds are Forever

Victorians carried locks of loved one's hair. Now you can do the same and wear it as a diamond. LifeGem, a synthetic diamond manufacturer in Elk Grove Village, Ill., uses cremated remains or a simple hank of hair to create "memorial" synthetic diamonds.

Benefits: "These diamonds are ordered and produced for personal, sentimental reasons," says Dean VandenBiesen, co-founder and vice president of LifeGem. "It solves the dilemma many have of keeping their deceased loved ones close," he says. Customers can choose the cut, color and carat of their diamond, with prices ranging from $2,500 to $25,000 per piece.

Considerations: Because LifeGem diamonds are created individually from start to finish, the manufacturer doesn't guarantee the clarity of the finished product. As with other lab-grown diamonds, memorial diamonds have no resale value, with the exception of those created using carbon material from celebrities.

A LifeGem diamond created with locks of Beethoven's hair, for instance, sold at auction for $200,000. VandenBiesen says his company is now working on creating a diamond with hair from late pop star Michael Jackson.

A Diamond for Every Budget and Style

Whether you plan on buying a modest gem or one that can be seen from across a football field, there's a diamond out there within your means. And keep in mind that diamonds come in all styles, including classic round cut, colored diamonds and antique stones. Finally, be sure to research area jewelers, comparison shop and ask about warranties and discounts when you browse the counters.