Global Investment Grade for Natural and Synthetic Gems used in Financial Investments and Commercial Trading and Method of Creating Standardized Baskets of Gems to be Used in Financial and Commercial Products

Abstract

A computer-implemented system and method to create a fungible global standard for diamonds and gemstones. The process involves grouping diamonds in an investment standard according to their gemological, proportional, optical and light behavior characteristics. Diamonds that conform to the investment grade standard are interchangeable within a specific size range according to an equivalent monetary bundling process. Diamonds subjected to the standard conform to a holistic set of gemological, proportional, optical and light characteristic requirements that enables diamonds to be classified into a extraordinarily homogeneous, visually indistinguishable and highly fungible group which can be used to create baskets of diamonds to form an index/benchmark for diamond pricing, financial instruments, and a standard that can be used for certifying diamonds as investment grade to insure quality.

What is claimed is: 
     
         1 . A computer-implemented system for determining a cash price of a standardized basket of gems comprising:
 one or more bundles of gems wherein each bundle includes one or more gems having predetermined gemological criteria, the predetermined gemological criteria including one or more characteristics from a gemological standard such that when the one or more bundles are grouped together, the standardized basket has an equivalent monetary value that is the same as other standardized baskets of gems;   a financial instrument based upon the equivalent monetary value of the standardized basket of gems;   an exchange for purchasing and selling the financial instrument wherein the financial instrument has a price as tracked by the exchange of NAV;   and a computer configured with a data storage and processing capabilities for determining the cash price of the standardized basket of gems using the following algorithm wherein the cash price X 0 =(NAV−FI+FE)/Y 0 , wherein FI=fund interest income, FE=fund expenses and Y 0 =weighting factor (or basket multiplier).   
     
     
         2 . The system of  claim 1 , wherein the standardized basket is sold as a commercial product using the cash price. 
     
     
         3 . The system of  claim 1  wherein the financial instrument is traded on an unregulated exchange. 
     
     
         4 . The system of  claim 1 , wherein the financial instrument is traded on an SEC-regulated exchange. 
     
     
         5 . A computer-implemented method for creating standardized baskets of gems comprising:
 selecting one or more bundles of gems wherein each bundle includes predetermined gemological criteria, the predetermined gemological criteria including one or more characteristics from a gemological standard;   selecting gems that meet the predetermined gemological criteria for each bundle to create qualifying bundles of gems; and   grouping the qualifying bundles of gems into standardized baskets of gems, wherein each standardized basket of gems has similar qualifying bundles of gems and thus an equivalent monetary value; and   configuring a computer with a data storage and processing capabilities for determining the cash price of the standardized basket of gems using the following algorithm: X 0 =(NAV−FI+FE)/Y 0 , wherein FI=fund interest income, FE=fund expenses and Y 0 =weighting factor (or basket multiplier).   
     
     
         6 . The method of  claim 5 , wherein said gems are diamonds. 
     
     
         7 . The method of  claim 5 , wherein said gemological standard is a Diamond Grading Report of the Gemological Institute of America. 
     
     
         8 . The method of  claim 5 , wherein the one or more bundles of gems includes one bundle. 
     
     
         9 . The method of  claim 5 , wherein the one or more bundles of gems includes one gem in each bundle. 
     
     
         10 . The method of  claim 5 , wherein the one or more bundles of gems includes a plurality of gems in each bundle. 
     
     
         11 . The method of  claim 5 , wherein each standardized basket includes the same number of qualifying bundles of gems and each corresponding qualifying bundle of gems between each standardized basket includes gems having similar predetermined gemological criteria. 
     
     
         12 . The method of  claim 5 , wherein the predetermined gemological criteria includes a size and a quality of a gem such that each qualifying bundle of gems in a standardized basket includes gems of a similar size and a similar quality to that of a corresponding qualifying bundle of gems in a second standardized basket. 
     
     
         13 . The method of  claim 5 , further comprising creating a financial instrument based on the standardized basket of gems and the equivalent monetary value of the basket of gems. 
     
     
         14 . The method of  claim 5 , wherein the financial instrument is traded on an unregulated exchange. 
     
     
         15 . A computer-implemented method for facilitating the trading or selling of financial instruments based on standardized baskets of gems comprising:
 selecting one or more bundles of gems wherein each bundle includes predetermined gemological criteria, the predetermined gemological criteria including one or more characteristics from a gemological standard;   selecting gems that meet the predetermined gemological criteria for each bundle to create qualifying bundles of gems;   grouping the qualifying bundles of gems into standardized baskets of gems, wherein each standardized basket of gems has similar qualifying bundles of gems and thus an equivalent monetary value; and   determining the equivalent monetary value of the standardized basket of gems on a periodic basis by a computer with a data storage and processing capabilities configured for determining the cash price of the standardized basket of gems using the following algorithm wherein the cash price X 0 =(NAV−FI+FE)/Y 0 , wherein FI=fund interest income, FE=fund expenses and Y 0 =weighting factor (or basket multiplier).   
     
     
         16 . The method of  claim 15 , wherein the financial instruments are traded on an SEC-regulated exchange. 
     
     
         17 . The method of  claim 15 , wherein the financial instruments are traded on an unregulated exchange. 
     
     
         18 . The method of  claim 15 , further comprising determining an index based on the equivalent monetary value. 
     
     
         19 . The method of  claim 15 , wherein the predetermined gemological criteria includes a size and a quality of a gem such that each qualifying bundle of gems in a standardized basket includes gems of a similar size and a similar quality to that of a corresponding qualifying bundle of gems in a second standardized basket.