Step 1: Decide how much you can spend. If you are buying an engagement ring, the general rule is two months' salary, but the sky's the limit if you're in pursuit of the perfect stone.

Step 2: Choose the shape of diamond you prefer. Although the brilliant round cut is most popular, diamonds come in many cuts, including square, oval, emerald cut, or even designer cuts.

Step 3: Inspect the diamond's clarity (the degree of transparency). Diamonds are rated on a clarity scale that grades diamonds from 'flawless' to 'obvious inclusions’ the higher the diamond's rating on this scale, the greater its value.

Step 4: Examine the diamond's color. Although you may not generally think of diamonds as having color, most have a yellow, gray or brown cast. Diamonds are also available in 'fancy' colors such as vivid yellow, pink or blue. These diamonds are rare and more expensive than the normal D to Z color range of diamonds.

Step 5: Examine the diamond's cut, which is crucial to the brilliance of the stone and a major factor in its value. A well-cut diamond reflects and disperses light in beautiful ways; thanks to qualities such as symmetry and depth. Diamonds are graded on a scale from Ideal to Poor and this grade should carry a great deal of weight in your decision.

Step 6: Determine the weight, which is measured in carats. The greater the carat weight, the more valuable the diamond. Keep in mind that since larger stones are rare, two 1/2-carat diamonds are less expensive than a single 1-carat diamond.

Step 7: Compare several diamonds side by side and get a good idea of what you can find in your price range. No two diamonds are alike, so examine all of them carefully for their unique qualities.

Step 8: Make your final decision based on which diamond offers the best combination of the four C's: clarity, color, cut and carat.