What is the best investment: real estate or diamonds?

  • Why is it better not to invest in real estate?
  • What is the difference between investing in real estate or investing in commodities?
  • Why are diamonds the best investment?

For many decades it was said that investing in real estate was the best or at least the safest investment. The value of a house or apartment would only increase and so would your profit when selling. Nowadays, however, there are other sustainable investments as well. You could, for example, invest in commodities.

Why is it better not to invest in real estate?

In the period prior to the financial crisis of 2008, real estate was not only practical, but also one of the most profitable and best investments. Every year house prices increased slowly but steady. Real estate was not only accessible to specialized investors, but also to individuals who wanted to invest their savings in something lucrative. Because of this, house prices increased with 175% between 1995 and 2008 .

This changed because of the financial crisis in 2008. In the United States, the real estate bubble burst when the market stagnated and many families could no longer pay their mortgage, resulting in a oversupply on the housing market. The demand decreased while the supply increased, with a huge price drop as the result.   

What is the difference between investing in real estate or investing in commodities?

The American financial crisis had a big impact in Belgium and other European countries. Real estate prices dropped with 16% in less than 4 years. What happened to the stability of real estate? It is well-known that a vacant house will drop in value when it is not maintained properly. This means you are bound to maintenance costs, search for tenants, possible damage problems and defaulters. Therefore, many owners feel the urge to sell their house in a short period of time, which results in losses.

A big contrast with investing in commodities such as diamonds! When investing in diamonds, the value increases without you doing anything. You simply store them in a vault until you are ready to sell them. This way you can easily wait for the right buyer and enjoy the highest added value.

Why are diamonds the best investment?

When investing in commodities, you need to make the right choice. Most commodities have an expiration date and can only be kept in your investment portfolio for a limited period of time. Diamonds do not have an expiration date and are therefore more resistant to crisis. Besides, a diamond is not a bubble waiting to burst. The supply is stable and the demand is always slightly higher, which results in steadily rising prices. Experts predict a stable and positive grow for the coming decades, making diamonds the best investment.

As seen with the comparison with real estate, maintenance is a huge benefit of investment diamonds. Coffee or crude oil has to be stored, which adds to the costs. Diamonds are not only easy to store, they also have a practical and aesthetic aspect. You can set your investment diamond in a beautiful jewel or displayit at home

How to diversify your investment portfolio? Why should you invest in diamonds? Please ask our BNT Diamonds experts for investment advice.

Author: Daan Deruyter
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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