Investing In Loose Diamonds

As investment tools diamonds may be compared to stocks and bonds, property and commodities, but for most people they are symbols of love which are meant to last a lifetime.

A good salesman will often make the claim about something that “this is an "investment will always be worth more than it cost". This assumes that the goods rise in value and can be sold easily with low costs.  Demand and supply is everything.  But the good news is that diamonds historically appreciate at about the same rate as money inflates. 

To quote one (very wealthy) diamond merchant "most luxury items we buy wear out or rot, but diamonds last forever and have more intrinsic value than cars and houses.”  Land is a commodity that does have the same sort of intrinsic value as gold and diamonds.

So why buy jewellery as an investment?  Firstly not everybody trusts banks and in some countries as much as  ten percent of wealth is "portable". For example, cashing in gold and diamonds helped many Chinese people escape from Indonesia in 1997.  Some women regard their diamonds as security or "running away assets” as very few diamonds are returned when a relationship ends. To quote the much married Zsa Zsa Gabor “I never get upset when a marriage breaks up and I lose a husband but I would be devastated if I lost my diamonds!” They are emotional and family investments with a band of diamonds in the shape of an eternity ring marking a birth; and a ruby bracelet is the perfect gift for a 40th wedding anniversary … the list is endless.  Diamonds are often an important part of an inheritance representing love in a family and therefore rating higher than any monetary value.

To effect the best investment consider buying diamonds that can be worn most of the time (not left at home for thieves) and you may not have  to pay as much to insure them.  A single diamond does not go up in value any faster than a trilogy ring or cluster ring for example, and a single loose stone might cost less to set.  Medium quality diamonds with no visible imperfections or obvious discoloration are the most saleable, and go up in value at rate proportional to the rarer more expensive diamonds.

Princess cuts are what are hot at the moment, with heart, marquise and other shapes coming in and out of fashion. Round brilliant cut diamonds are probably the most resaleable in the long term.

If you hear someone saying that investing in jewellery is not a wise move, direct them to the Diamond Protection Service who are a division of De Beers Limited who own 80% of all the diamond production of the world.  They have the facts and figures to prove that diamonds increased in value by 70% from 1980-1990. Since 1990 their prices have stabilized and now rise by something between 5-10% annually which is still a very good return on an investment in today’s market.