The Four Cs of Buying Diamonds—and the Fifth C Defined

The four Cs are the four characteristics traditionally used to determine the quality and value of a diamond: carat, cut, clarity, and color. The characteristics of a diamond are graded and categorized by the diamond industry to establish its retail value. Quality diamonds are graded by a qualified expert and carry a certificate of authentication.

A fifth C, which stands for "conflict-free," denotes a rough diamond that has not been mined in a conflict zone.

Here's a look at how diamonds, an ever-popular choice for engagement rings, are valued.

What Are the Four Cs of Diamonds?

Before investing in a diamond, it's important to learn how to be sure you are getting what you pay for. Understanding how a diamond's value is determined will also help you make tradeoffs. You may prefer a larger stone, for example, with somewhat less clarity or slight flaws versus a flawless but much smaller stone. You should explore your options with a jeweler when you choose your stone.

1) Cut

A diamond’s cut—its shape and facets—is what makes it sparkle. The more faceted the cut, the greater the sparkle. The most famous shape and cut, according to the Cape Town Diamond Museum, is the round brilliant, with 57 facets. Other popular cuts include the rectangular emerald (44 facets), the square princess (50 or 58 facets), the oval (56 facets), the slender marquise (58 facets), and the hybrid pear (58 facets).

2) Clarity

Clarity measures the purity of the diamond and the presence (or absence) of tiny flaws. The clearer or more flaw free the diamond, the more brilliant and valuable it becomes. Internal flaws are referred to as inclusions, while external ones are called blemishes. Jewelers and gemologists use a scale from FL (flawless) to VVS (very, very slightly included) to SI (slightly included) to I (included), with number gradations for each category, to rate clarity.

3) Carat

A diamond’s mass, or weight, is measured in carats. A metric carat is 200 milligrams, and each carat can be subdivided into 100 points. Diamonds that are more than one carat are expressed in decimals, as in a 1.25-carat diamond. The price per carat increases according to a diamond's size since large stones are rarer.

4) Color

Diamonds come in many colors and are categorized as either white—essentially colorless—or fancy. Because distinctions of color among stones are subtle, experience and training are required to color-grade a diamond. These variations make a major difference in diamond quality and price. Depending on the hue and intensity, a stone’s color can either diminish or enhance its value.

The color evaluation of white diamonds is based on the absence of color. The Gemological Institute of America's (GIA) color grading scale is the industry's most widely accepted system. It categorizes diamonds on a scale of D to Z. All D-Z diamonds are considered white, even though they contain varying degrees of yellow and brown.

• Perfectly colorless diamonds at the D end of the spectrum are considered the highest quality and the most expensive. Colorless or clear white diamonds are more desirable, as they allow the most refraction of light or sparkle.
• Brown- or yellow-hued diamonds at the Z end of the spectrum are deemed the lowest quality. Brown diamonds with varying levels of intensity are the most common and are in oversupply. They have been marketed as cognac, champagne, or chocolate diamonds to increase their appeal.
• Fancy diamonds are stones that exhibit other colors, as well as stones with a yellow intensity beyond Z. Those that come in tones of naturally saturated reds, pinks, blues, and greens are the scarcest.

Celebrities, royals, and stars can also influence demand, causing a temporary spike in prices for a particular color. A diamond that is in fashion may lose value when trends change.

A Fifth C: Conflict-Free Diamonds

A fifth C—"conflict-free" or "blood-free"—has become increasingly important to many buyers in recent years. "Conflict" or "blood" diamonds refer to rough diamonds that originate from a civil war-torn country or zone and may have been used unethically to finance a war against a government or rival faction. Diamonds mined during civil wars in more than a half dozen African nations have been labeled conflict diamonds.

In the same spirit, many shoppers are also seeking "ethical diamonds"—stones that have been mined and refined with fair pay, safe working conditions, environmentally sound practices, and no human rights abuses.

"Conflict-free" diamonds are mined in stable countries with more ethical and enforced business and labor practices, such as Australia or Canada, and are sold by reputable dealers or jewelry retailers. They are rated by the Kimberly Process Certification Scheme (KPCS) and are certified as conflict or blood-free.