They can be, but you have to know what you are doing! Diamonds are so often overlooked as an investment opportunity, most of us just think that they are expensive because ladies (and increasingly men) think that they look pretty are willing to make their partner pay whatever the cost is to acquire one. What people don't realise is that just 20% of mined diamonds end up being used for jewellery, the other 80% are consumed for industrial purposes and will never live to see the consumer market. The finest diamonds in terms of clarity, cut and color, will make it to the jewellers whilst those without a fine appearance will generally be used for blades or cutting. Diamonds are expensive primarily because they are very rare and supply struggles to meet with the demand, the appearance of a diamond remains a significant factor however.
Are Diamonds A Good Investment?
Diamonds are a high risk investment with potentially huge returns, learn more about diamond investment here.
It is that latter factor which makes it important for you to put in the time and effort to studying diamonds, or enlisting the help of an expert such as an experienced jeweller, before taking the plunge and attempting to build a portfolio of loose diamonds. Non-loose diamonds should not be considered a good medium term investment, mainly because the mark-up involved in acquiring new encased jewels will eat into years worth of future profit. That said, diamonds have become much more expensive over the past decade and will continue to rise in price for the next decade; economic recovery will make sure of that. A loose diamond is also much easier to sell, as it opens the market to pretty much anybody who is interested in wearing a diamond as jewellery; an encased diamond limits your market to those who enjoy your particular choice of ring design.
At very least a diamond will appreciate in value at a rate equal to the rate that money inflates, in recent years diamond prices have increased at far above the average global rates of inflation. A diamond lasts forever, longer than property even, and has more intrinsic value to and or cars. Diamonds can be considered a portable currency just like gold or silver, they can be used as a means of raising cash when you need it, wherever you are in the world. Up to 10% of wealth in most developed nations is held in 'portable currency' such as gold or silver rings, collectible precious metal coins, or similar. The question posed in the title of this article is a very difficult one to answer, but as a general rule a diamond will never be a bad investment and will often be a good one. They are, undoubtedly, an excellent alternative to the pieces of paper that we all seem to invest in on financial markets.
The Diamond Protection Service, who are run by the worlds biggest diamond producer De Beers, claim that diamonds increased in value by 70% between 1980-1990. Since 1990 prices have been relatively stable, increasing at 5%-10% annually, a rate which is still far above the normal rates of inflation and certainly higher than standard interest rates from savings accounts.
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