Diamonds
as investment

Would it be wise to invest in diamonds? Can you be certain that they will retain their long-term value?

Historically, diamonds have been highly valued for their instrinsic aesthetics; their beauty in their own right and as components of jewellery throughout civilisation.

Popularly, when experts talk about investment diamonds in the media, they are usually refering to diamonds which are exceptional in carat weight, colour or clarity; usually diamonds of at least 5 to  20 carats in weight that are stored in vaults across the world as investment items.

Since March 2009 the diamond industry has experienced double-digit growth figures for rough diamonds combined with sharply slashed production figures as a result of the global financial crisis. 

This has led to a plethora of articles recommending investment not only in mining companies and natural resources funds, but in the purchase of larger loose diamonds of 5 to 20 carats.  Fancy coloured diamonds are regularly singled out in the press as particularly interesting 'trend' investments.

By the very nature of their scarcity and value, diamonds of 5 to 20 carats will command a premium, but they are also extremely difficult to resell, even for major diamond manufacturers (mines) and sight holders of the Diamond Trading Company (DTC).

The DTC is the rough diamond sales and distribution arm of the De Beers Family of Companies and the world's largest supplier of rough diamonds, handling approximately 40% of the world's supply by value.

Natural fancy coloured diamonds are very difficult to buy at a realistic price; slight differences in colour, tint and reported market trends can sway prices dramatically.

At Vashi.ie we examine every single loose diamond individually and provide a valuation certificate, supported by our money-back guarantee.  We know the insides-out of every diamond we sell.

Here is some simple food for thought:

  • Growing economic fears and recent recession has seen many industries see a downturn in business. This has not been the case with diamonds. Diamonds are still proving to be a good investment. In fact, diamonds are actually a perfect recession-proof investment vehicle.
  • A good quality natural diamond should always increase in value. While the market for other jewellery items might have seen a slight recent decrease, diamond jewellery sales continued to rise globally.

There are several reasons for this trend:

  • The price of diamonds continues to increase due to the steady demand for diamonds. Diamonds are the precious stone used most often in engagement rings. While the cut and size may vary there is no indication that diamonds will lose their appeal as engagement rings anytime soon. Rising populations, growing trends for larger engagement rings and steady marriage statistics go some way in support of this theory.
  • The diamond endures as a social status symbol of the rich. Celebrities continue to exhibit expensive diamonds ensuring they remain fashionable and highly aspirational status symbols. Other sectors of the wealthy in society (such as royalty and notable society figures) are known to be purchasers and owners of significant diamonds. Financial issues such as a slowing economy seemingly affect these people far less; ensuring diamonds remain on show and front of mind.
  • Unlike stock and shares, a diamond is a physical asset, one which is virtually indestructible during every day wear or whilst stored securely. When correctly insured, it is a difficult asset to lose completely. Unlike wine or fine art, it its highly unlikely your diamond will be broken, defaced, burned or mistakenly consumed!
  • Unlike real estate investments, diamonds do not require continual maintenance nor do they require taxes to be continually paid. This makes them considerably inflation-proof as an investment vehicle.
  • Anyone can own a diamond. You need not register a diamond or alert others that you own it. Diamonds last longer than a lifetime so there is no need to worry about it wearing out. With care, your diamond can be a future heirloom.

 

 

Disclaimer

This information in this website should not be regarded as an offer or solicitation to conduct investment business as defined by the Financial Services and Markets Act 2000. Past performance of investments is not necessarily indicative of future performance. The value of investments may fall as well as rise and the income from investments may fluctuate and is not guaranteed. Investment advice should always be sought from a qualified financial adviser before any investment is made.