You can buy diamonds from established dealers, such as those in London's Hatton Garden. The best range to choose is 1 to 1.

75 carats - large enough for investment, but small enough to re-sell. Do get an independent assessment of its value on internationally accepted standards. Have an acceptable certificate, and have the diamond packaged with it, so that there is no possibility of any dispute.

Certificates come from a gemmological laboratory, like the European Gemmological Laboratory, the International Gemmological Institute and the Gemmological Institute of America.

The terms of sale should include all risks insurance, if the stone is deposited in the vault of a clearing bank in the UK or the Channel Islands. A diamond is usually delivered to the place specified by the investor, with a microfilm of its certificate sealed into a transparent sachet by the organisation that has provided the certificate.

Diamond investment companies will normally only offer to resell a diamond on behalf of its client after two years.

There will usually be a 10% handling charge - you should check this. Some companies also offer a 'no loss' guarantee. This is an undertaking to resell any stones purchased from them not less than two years before at a price that, after all the handling and administration charges, enables the client to recoup the original price.

The only effective means of selling your diamond is through the same diamond investment house you bought it from. So try to buy from one that is well-established and highly regarded, and likely to stay in business. VAT will be payable on the purchase of a diamond unless it is taken out of the country or to the Channel Islands.

CCMG - 2013