What is the best investment? Cacao, iron ore or diamond?

  • Investing in cacao?
  • A long or short term investment
  • Clear blue diamonds

Investing in cacao?

One of the best investments in the economically unstable 2015 was without a doubt cacao. The value increase in international markets was 9,7%, while many other raw materials such as gas (-17,4%), crude oil (-32,11%), iron ore (-32,35%) and copper (-24,77) sustained heavy losses. Everyone loves chocolate, regardless of the economic conditions.  A constant high demand leads to price increase in the market with a stable or declining supply.

A short or long term investment

Of course, an investment should be financially profitable in the (medium) long term. Limited durable products such as milk, sugar or cocoa must be resold to final producers or consumers within a certain period of time. By 2016, this was visible on the international markets: the best investment in 2015 had an oversupply which dramatically reduced the price and value of the investment.

Iron ore also had a decrease at the start of 2016. The decline in value in 2015 (-33,35%) was largely reimbursed by an increase of 90,11% in 2016, accounting for the best investment in the commodity market last year. These figures, however, show a volatile market, where buying and selling at the right moment is crucial and always poses a high risk. Only three raw materials had an increase of value in 2015 and 2016. Cotton had an increase of 6,22% in 2015 and 12,94% in 2016. Sugar had an ascent of 6,88% in 2015 and 30,33% in 2016. The third safe and stable investment was diamond.

Clear blue diamonds

A strong demand always leads to price increases when the supply is limited. Diamond is still a natural raw material with only a limited number of sources. High quality diamonds with minor impurities are getting more rare, therefore the price has risen sharply. For example, a Fancy Vivid Blue natural diamond had an average price increase of 8,4% in 2015 and 16,67% in 2016. Compared with iron ore it is not the most spectacular, but the safest and best investment. Similar figures apply to pink, yellow and green Fancy Vivid diamonds. These price increases were forecast and can be called stable as volatility in the market is limited.

Recent studies indicate that diamond prices will increase steadily over the coming decades. This is mainly due to the growing demand from the BRIC countries (Brazil, Russia, India and China) and the declining supply due to limited natural resources and depletion of mining capacity. Therefore, diamond remains the best investment that is also sustainable and cost-effective.

Investors who are interested in diamonds can always be advised by BNT Diamonds experts for objective advice and guidance. Always the best investment to your wishes.

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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