Investing in diamond: smart move or foolish game?

  • Investing in diamond is stimulated by diamond-focused listed funds.
  • The incredible prices offered on auctions also have a beneficial effect on the popularity of investment diamonds.
  • When investing in diamond, you have to pay attention to the price transparency, quality guarantee, transaction fees and liquidity.

Diamonds have always been the symbol of love. More and more investors who are looking for a stable investment with a potentially high profit, fall for the charms of the diamond. The question then, is whether investing in diamond is a smart move or rather a foolish game. The volatility in the stock market fosters the search for relatively stable investments. Those who have a budget to invest, focus in recent years on hard assets that can be enjoyed, such as art and jewelry. For this, investing in diamond is a natural alternative.

Until recently diamonds, as an investment, had disappeared from the radar. The lack of price transparency and a liquid trading market proved to be the main reasons for the declining interest to invest in diamond. The difficulties in setting uniform quality standards for diamonds also contributed to a reduced investor interest.

Worldwide, investing in diamond has been stimulated by companies. In addition, the demand increased. With the development of diamond-focused listed funds, they now try to repeat the past success of gold and silver. “Each stone is unique”, says Brent Fykes, senior investment partner at GenSpring, a multifamily office for individuals with a minimum of $ 20 million to invest. “One gram gold is one gram gold, but that is not the case with diamonds”, according to Fykes.

The buzz around investing in diamond also increased by the incredible amounts offered at auctions for both rough and polished gemstones. For example, the diamond price of the Pink Star broke all records. The hunger for diamond that is increasing worldwide and the limited mining activities facilitates supply and demand. Of course, anyone who wants to investment in diamonds enjoys the benefits of this.

The research company Wealth-X reported that the price of rough diamond rose with almost one third since 2005. The supply declined while the demand increased. Those who want to jump on the bandwagon to invest in diamond must pay attention to 4 principles: price transparency, quality assurance, transaction costs and liquidity. Before you  begin investing in diamond, you must understand how each one of these aspects has an influence on the price. If your knowledge of diamonds and the diamond market is limited, then investing in diamond is a foolish game. On the other hand, if you are well informed, investing in diamond is a smart move that will surely pay off in the long run. Therefore, buy your diamonds in close partnership with experts that possess the necessary knowledge.

Would you like to begin investing in diamond? Find your perfect diamond and request a price offer or contact the experts of BNT Diamonds.

Author: Naomi Howard
Source: BAUNAT

With this article, BAUNAT strives to inform you thoroughly about investing in diamonds. No investment can be guaranteed to be without risk or fully according to your expectations. That is why we recommend to research the risks and aspects of investing in diamond properly to ensure that you make the right choice for your portfolio.


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