Why Should I Invest in Diamonds?
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Prices of physical commodities have been appreciating lately and are showing no signs of stopping. This is due to several downturns in the global economies in recent years, which make us divert our attention to alternative investments in hopes that they are better financial ventures. Consumers are now starting to realise the benefits of putting their money into precious metals such as silver and gold, and even in precious stones, especially diamonds.
WHY DIAMONDS?
Over the past years, investing in diamonds and using them as financial hedging tool has been increasingly popular.
Head over to Wikipedia, encyclopedia’s online version, and you will find a section dedicated to them as investments.
This alone tells us the importance of diamonds, particularly on their impact on the financial world.
The demand for diamonds to use for investments and as a source of financial cushion continues and here are some reasons why this is so:
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Diamonds are forever.
Indeed, one of the most durable precious stones, a diamond is the hardest substances on Earth. With proper handling and care, these gems will not break or wear off easily.
Diamonds do not easily succumb to wear and tear; however, if improperly stored with other loose diamonds, they may sustain scratches or even chip off.
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Diamonds are unaffected by inflation.
Unlike commonly held assets, most physical assets, are inflation proof. Other physical commodities that share this immunity are real estate and gold.
Instead, these investments tend to appreciate with inflation. For example, if you get diamonds in Melbourne, you can ask experts about how your acquisition will fare during an Australian financial crisis or with predicted inflation throughout the year.
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Diamonds are manageable.
These precious stones are convenient and easily transferable investments. You can take it anywhere with you or you can opt to have it stored, without needing much storage space.
You’ll be amazed that the smallest of safes can secures millions of dollars’ worth of diamonds.
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Diamonds are investments you can enjoy.
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These gorgeous tangible assets are investments that you can definitely enjoy while you are in possession of them.
You can have them mounted on a piece of jewellery and wear it without worrying that you can no longer sell it in the future should you wish to.
HOW TO INVEST IN DIAMONDS?
Diamond investments are alternative investments that help diversify your portfolio.
And since these are physical commodities, you can buy them just about everywhere. But here are a few tips on how to invest in diamonds safely:
- Be educated on the 4Cs.
Or, at least learn the basics about a diamond. You can start with familiarizing yourself with the 4Cs of diamond quality—cut, colour, clarity, and carat weight.
When purchasing a diamond, these are the four important characteristics that investors need to understand.
Cut refers to the diamond’s sparkle. Colour refers to the lack of which when talking about the colourless diamond and the presence of which when talking about coloured diamonds.
Clarity refers to the flaws and imperfections found on the diamond. Carat refers to the total weight of the stone, and not to its size.
- Check out certification.
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An investment diamond should be graded by no less than the primary grading authority, Gemological Institute of America (GIA).
The GIA grades all types of diamonds and provides a GIA grading report detailing the qualities of a diamond. GIA grading reports are highly valued in the industry.
- Compare Prices
Because unlike stocks, the price of diamonds are not set by bids and rather depend on a variety of factors, including the 4Cs.
So, if a dealer is offering a lower price for a similar one, you should be more cautious about these transactions and ask as many questions as you want to the dealer.
Category: Investing
