Does Investment in Diamonds Provide Long-Term Value?

Does Investment in Diamonds Provide Long-Term Value?


Without a doubt, diamonds hold a very special place in the heart of every woman but even the investors have always kept a very keen eye on them. During the past few years, people have seen a number of highs and lows in the diamond market especially because of the increased interest of the masses in the technological sector.

Despite the technological revolution and the introduction of cryptocurrencies, investors are still looking towards diamonds as a high-value investment. According to Rapaport Diamond Trade Index, the value of three-carat diamonds increased by 145 percent whereas that of five-carat diamonds did 171 percent between the years 1999 and 2011.

Vashi Dominguez who is the Chief Executive of the diamond trading company Diamond Manufacturers says, “Certain types of diamonds, including colored varieties, have held their value over the past few years better than other more volatile equity investments.”

As of 2014, the diamond market around the globe was increasing because of the high demand for the gems in the in emerging markets. The investors consider diamonds to be a great investment because they are able to buy these precious stones at low transaction costs and with the passage of time, their value increases just like that of art or antique.

Investing in Diamonds

The investors can invest in the diamonds in three different ways:

Buying the shares of diamond mining companies

This is a cheaper way to enter the diamond market and with the increase in the price, one can receive significant investments in return. It does come with its own share of risks but through organized planning, one can escape the danger involved.

Buying the gems with the purpose of storing them and selling them at a later stage

Diamonds can easily stand the test of time and will stay with you for an eternity. By storing them as gems or as a jewelry item, you can bank on some significant amount and can make a huge living for yourself. Companies like Heart in Diamond even allow you to turn locks of hair or cremains into diamonds. Here is a way to increase your collection of gems and keep the memories of your loved ones intact with you.

Investing in diamond funds

There are plenty of companies which launch diamond funds and provide an opportunity to the investors to earn a handsome sum of money. The index-based exchange-traded fund (ETF) had total net assets of $12.3 billion, as per April 2016. Since its establishment, the fund has been able to give a 6.92 percent return to the investors according to the stats revealed in March 2016.

Investing in tangible assets like diamonds may seem to be quite appealing but it does come with certain pitfalls. Justin Modray at says, “Perhaps the biggest issue is that, unlike gold, diamonds are not homogenous. That means diamonds need to be valued individually based on factors such as shape, color, and clarity, not just their weight, so it’s hard to track accurately their value as an investment.”

Despite the risks involved, diamonds are a promising market and do not hold as much of a risk as does other technological ventures.

Report this Content
This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.

More on Odyssey

Facebook Comments