FINE JEWELRY AS A PURCHASE

Diamonds are one example. Prices of diamonds have risen although the prices have escalated drastically only for All diamonds, however, have not risen in value and are not in ' supply. DeBeers, to broaden the market for diamonds, has appealed to the middle-income consumers with a variety of lesser-quality-and cheaper-stones. These diamonds are smaller in carat ht and of poorer color and clarity.

In fact, most of the diamonds you will find in jewelry today are not of top clarity, color, and cut, regardless of their size-and these diamonds may have scarcely increased at all in price. All you have to do is look at advertisements you will find plenty of diamonds being advertised for a few :red dollars or even less. There is no shortage of these diamonds.

Very wary, therefore, of any talk of "diamonds" as an invest-unless you can afford an investment-quality diamond of top quality, clarity, cut, 1 carat or larger in size. (See "Buying Diamond is," below.)

Remember, too, that diamond jewelry is manufactured. Diamond jewelry, per se, then, is no more an investment than gold jewelry. Prices would have to soar much more dramatically in most , for you to recoup what you paid.

Jewelry with colored stones, too, should be considered simply as a purchase. The supply of colored stones-rubies, emeralds, sapphires, and others-is not as tightly controlled internationally as the diamond supply. Individual countries may control their own production, but the worldwide market is a fluid one. A basic problem is that colored gems go in and out of fashion, especially in the United States, with fashion helping to set the demand and the price. In 1978, as the prices of diamonds rose, however, so did the prices of colored stones, because people turned to them for price reasons instead of diamonds. Those prices could just as easily go down, if top-quality diamond prices were to fall, or rise, if diamond prices go higher.