Carat (Part 1 of 4): Understand the 4 C's and Save Thousands of Dollars!

When I took my first course on Diamond grading many years ago, I thought that understanding carat weight would be a complete no-brainer.  The bigger the diamond looked to my eye, the higher the carat weight, and therefore the more expensive it must be.  Right?

It is a common misconception that a larger carat diamond is more expensive. Carat is simply a measure of weight, rather than size. Two diamonds of the same carat weight viewed side by side can appear bigger or smaller based on quality of cut and the bigger-looking diamond isn't necessarily more valuable. Similarly, a larger carat weight diamond cut poorly could be less valuable than a smaller carat weight diamond cut well. (Differences in color and clarity can also make a small diamond much more valuable than a large one. See blog posts.)

So how does it work? The way the carat weight of a diamond is distributed in the cut makes a big difference in the value.  And since we always tend to look at diamonds from the top view, diamonds that are cut with a larger circumference (but a shallower depth) will look bigger than diamonds that are cut with a smaller circumference (but a deeper depth) even though their carat weight is exactly the same.  However, having a disproportionate cut will have an adverse affect on both the diamond’s beauty and value. In the photo shown here, the smaller diamond is a higher value than the larger one. (See my blog post on Diamond Cut for more information.)

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Tip: How is a carat weight measured in units?

• One carat equals 0.20 grams, and therefore a 5 carat diamond weighs 1.00 grams.
• One carat is divided into 100 equal units called points.  Therefore, 50 points is equal to ½ a carat, 75 points is equal to ¾ of a carat, and so on.

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TIP: Get an exact carat weight (it's not always easy)

Diamonds are weighed using an electronic microbalance that captures their weight to the fifth decimal place. It is imperative that you know the exact carat weight of a diamond you purchase, because even a small difference in carat weight can make a big difference in price. Getting the exact carat weight is often tricky because most jewelers will sell you a ready-made ring, which makes it impossible to weigh the diamond by itself unless it is taken out of the setting. At Maharani Jewels each individual diamond is weighed on a professional microbalance (before setting) to ensure accurate measurement and complete transparency and disclosure of a diamond’s characteristics.

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TIP: Don't just rely on total carat weight

Most jewelers sell jewelry based on the total carat weight of a piece, which means the weight of all the individual diamonds put together.  However, large diamonds are much more rare than small ones, so two jewelry items with similar total weights might have very different prices. For example, with the quality being the same, an engagement ring that consists of a 0.75 carat centre stone and 0.26 carats of side diamonds (but is stated by the jeweler as being 1.01 carats of diamonds), is completely different from an engagement ring that consists of a single centre stone weighing 1.01 carats.  The engagement ring that consists of a single 1.01 carat diamond is valued almost 50% higher than the first ring.

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TIP: You don't have to get hung up on a few points

The visible difference between a diamond that is slightly under a carat and one that is slightly over a carat is very minute, yet the difference in value (given the same quality) can save you up to 20%.  Such diamonds of incredible value are known as ‘magic sizes.’  This can certainly help if you have a specific investment range in mind and want the look of a bigger diamond but do not want to alter the color, clarity, and cut.

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Stay tuned for the upcoming parts of my blog series on the 4 C's in which I will take about cut, color, and clarity, and share many more industry secrets that will save you thousands of dollars!