Exploring Diamonds as an Alternative Investment

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There are a number of investment opportunities available for budding investors, such as buying land or real estate, currency trading and buying gold. However, besides all of these, diamond investment has become more popular in the last ten years and is now a favoured choice with those looking to generate a return on their initial investment.

The reason for its rise in popularity stems from a number of factors, including some of the largest mines closing around the world due to demand being higher than supply. In addition, the rise of wealth in countries such as China, Russia and India has also helped. This has resulted in more people having money available to invest. On the downside, as more people become attracted to the appeal of investing, the rarest diamonds have become even harder to find and purchase.

Why Diamonds?

During times of economic uncertainty when a number of countries in Europe are experiencing financial problems, the diamond market is doing extremely well. This was highlighted in a recent auction at the tail end of 2011, when a 110 yellow carat diamond was bought for £6.89 million. This form of investment is doing better than alternative options such as real estate and shares, and is proving to be a long term investment which will increase in value over the years.

The benefit is that diamonds won’t depreciate over time. As a result of this, the value will rise year-on-year, and if you keep hold of these assets, then five or even ten years down the line, you could be looking at a significant gain. In addition, you can split a diamond into smaller sections. These can then be sold on, without causing a major decrease in the value of the sections that you have left. In this sense, you can find buyers for each individual cut.

The Stats

Recognising the fact that the interest in diamond investment has increased is one thing, although let’s see what the statistics say. Since 2003, Vivid Yellow diamonds have doubled in price and during a five year period the value of Vivid Blue stones has increased by 243%. The sale of diamonds is also believed to have increased three-fold during a 25 year period according to the World Diamond Council. These are just some of the stats that highlight the advancements made through this form of investment. It is figures like this which reconfirm that diamonds are a more stable form of investment than alternative options.

As diamonds are a tangible commodity, you are able to carry them with you to all four corners of the world. This becomes relevant as you can protect your investment and you also have the ability to buy and sell in other parts of the world should the opportunity present itself.

It’s true to say that there are always uncertainties with any form of investment. However, with the current trends and projections for the future, diamond investment looks like a positive and stable form of investment and a safe option for a number of years. With any form of investment it can take time to build your portfolio and generate a decent return – you’re never going to double your money instantly. However, a high return on investment in this market is certainly achievable compared to alternative options.

If you are looking for a reliable form of investment during 2012, then diamonds are one of the best options to go for. Obviously, like anything, you need to consider your options when it comes to investing, so make sure you do some research first before jumping in, but if you do, your efforts may just pay off.


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