Ask for a Lab Report
Make sure any diamond you're considering has an independent grading report from the nonprofit Gemological Institute of America. This rates the four C's: the key characteristics of carat weight, color, clarity, and cut quality. It will also disclose whether the diamond has been laser drilled to reduce the appearance of flaws, or if the stone has had high-pressure high-temperature (HPHT) treatment to raise the color grade. (Neither affects quality; they just make the stone look better.) To avoid counterfeit reports, get a second jeweler's appraisal.
Look for Clarity
To be sure you're buying a diamond that will hold its value and likely appreciate over time, know the cutoff point for what's considered a quality stone. L.A. diamond dealer Frank Giganti says the color grade should be no lower than I (on a D to Z scale) and have the minimum clarity grade SI2 on the GIA scale. That combination ensures an "eye clean" diamond, meaning flaws aren't visible without magnification. Lesser, "commercial grade" diamonds can lose some of their value once you walk out of the store.
You might want to keep this advice close to your vest, but a smart move is buying shy, or selecting a diamond that's just under the magic weight of one or two carats. A high-quality one-carat diamond can cost a third more than a .95-carat stone, with a size difference that isn't noticeable to the untrained eye. "A cutter will sacrifice quality of cut to make weight," says L.A. gemstone dealer Danny Levy, so going low can also help you avoid a diamond that's poorly carved in the interest of adding weight.
Light It Up
Examine loose diamonds against a white background and away from spotlights in the store. Jewelers like diamonds that fluoresce blue, which masks yellow tints and makes the stones seem a higher color grade than they are, claims Fred Cuellar, a diamond cutter and the author of How to Buy a Diamond. Some jewelers use lights to accent a diamond's radiance, but the stone might look milky in natural light, cutting the value.
Before you plunk down your cash, order the weekly Rapaport Diamond Report sheet, which lists current diamond market wholesale asking prices. Many dealers don't realize this insider's tool isn't restricted to the trade; if they do, they won't tell you so. "This is a purchase that's driven by information," says Darrell Cavens, senior vice president of marketing and technology at online diamond retailer Blue Nile. Having a current Rapaport rundown of diamond prices by size, color, and clarity is like knowing a dealer's invoice cost before you buy a car. To roughly calculate what the dealer paid, simply multiply the carat weight by the listed price and add two zeros.