INSIGHTS

Diamonds are forever

The diamond, as a fact, is the safest haven by excellence, enjoyable also as time pieces.

 

Diamonds are not just for millionaire investors. For those who are willing to do their research, investing in the precious stones can make savings sparkle – though investors need to tread carefully. Diamonds are the next area for alternative investments. People have done wine and art and they are looking for something else.

Unlike art and wine, diamonds are portable and using them does not reduce their value – they are meant to be worn.

While many people might be familiar with traditional white diamonds, it is coloured diamonds that are now catching the eye of experts. Impurities in the rocks in some rare instances lead to a gleaming coloured stone being created. Their price is based on this rarity.

Value of diamonds

Around one carat of white diamond is produced for every ton of rock mined. With coloured diamonds the production rate is around 0.1 per cent of that.

The price of blue diamonds has climbed 228 per cent over the past decade and yellows by nearly 49 per cent. White diamond prices are up just 3.5 per cent over that period. But there are dangers for investors. Kormind says: ‘Diamonds are not only a store of value but they have outperformed any stock market in recent years.

The Five C’s of diamonds are :

  1. carat,
  2. cut,
  3. colour,
  4. clarity,
  5. certificate.

This last point is crucial to any would-be investor. A certificate from an accredited, internationally-recognised body such as the Gemological Institute of America means a diamond has been independently assessed for authenticity and graded according to its quality.

Any diamond purchase should come with this certificate – not one which is written in-house by the jeweller or dealer. Each stone should also have a laser inscription corresponding to its certificate – which should be checked by an independent third party.

Why invest in diamonds ?

Their Beauty Won’t Fade

Diamonds are a valuable and strong raw material. As a result, they are not subject to the usual wear and tear of other antiques.

They Have Stood the Test of Time

Remarkably, diamonds have been traded since the 4th century. This longevity is a testament to their strength, rarity and beauty.

Their Value is Protected

The rising mining, manufacturing, shipping and insurance costs involved in bringing a diamond to market help to maintain their value.

They Are a Safe Investment

Diamonds, like other essential hard commodities such as gold and farmland, are considered to be protected from drops in inflation and decreases in the value of a currency.

They Are Something You Can Wear

There aren’t many investments that you can take with you everywhere you go. Diamonds, thanks to their size, are an exception to the rule.

They Make an Excellent Gift

Diamonds can be gifted to your children or loved ones without the hassle of involving lawyers or notaries.