Quality differences, though of critical importance in setting values, are extremely difficult for the layman to judge, and in some cases cannot be determined accurately without expensive equipment. Information about realistic current market prices is difficult for private individuals outside the diamond trade to obtain, and there is little in the way of an organised secondary market in South Africa where private investors can convert their stones back into cash at reasonable prices. There is a widespread misconception that diamonds bought in the form of jewellery, from a retail jeweller, are a good investment. Because of the large and expensive stock any retailer has to carry, his margins have to be relatively high, and there's also the tax content of retail prices to consider - so diamond jewellery loses up to half its immediate cash value as you walk out of the door. Diamond prices are determined by world supply and demand, and set in US dollars, so the exchange rate of the rand in dollar terms impacts on local prices.
Diamonds also come in unusual colours such as pink and green.
These are known as fancy colours and are not graded on this scale, though they can be valuable. Diamonds are cut to many shapes such as round brilliant, pear, emerald and oval. Some of these are more popular and therefore higher-priced than others. A carat is one-fifth of a gram. Value tends to rise sharply as weight and size increase.