Diamonds have been symbols of romantic ventures for a very long time now. Movies of the ‘60s were full of them, and everyone remembers the Marilyn Monroe’s Diamonds Are the Girl’s Best Friend song. But when it comes to the business aspect of diamonds, there is always that reasonable questions if they are a sound investment.
Gold is still one of the most favorite investments when it comes to jewelry. However, in recent years diamonds are becoming more and more popular. Although they’re attractive on rings and earrings, diamonds are also a practical way to preserve your wealth.
The global economy has certainly been a rocky road in the past decade, starting from Global Economic Crisis in 2008. Since then, more than ever, people started paying attention to how they invest their money, and alternatives like diamonds seem to be the answer. Especially, naturally colored ones which are known to rich incredibly high prices at auctions.
Investing in diamonds
They’re small and easy to store
Investing in diamonds makes a lot of sense since they are small and don’t need much room so that makes them perfect for transfer. For example, Sweet Josephine Diamond which weighs 3.216g was bought for $28.5 million. And these millions could easily fit in your pocket or on your finger, unlike the money itself which would be very heavy and bulky.
Diamonds are durable
Besides being beautiful and shiny, diamonds are also the hardest substance on the planet. They are often used in various industries for cutting like in surgical scalpels and drill bits. But when it comes to investing, your investment will be durable and won’t wear off.
You can easily insure them
Of course that something so expensive will have big insurance. Since diamonds are small, they can easily get lost, while their high value often makes them an attractive target for thieves. However, something this small can easily be hidden in a lot of places and turned into a jewelry or accessory.
Behave well during inflation
Diamonds are the most resistant when it comes to inflation compared to gold, silver, and real estate. They are easy to move, which makes them the safest place to invest your money even if you don’t like them. That way, you will always have some money put aside for rainy days or when inflation hits.
How to invest
Diamonds are considered to be physical commodities and as such, you can buy them from various places. You shouldn’t invest everything in diamonds, but rather a small portion of your portfolio should be dedicated to this type of investment, and you should educate yourself on the other types of investments.
Learn the basics
If you want to become a diamond investor, then you will have to learn the basics. There are 4Cs of Diamonds you need to know more about: cut, color, clarity, and carat weight. Color is something that people easily notice and currently pink diamond investment is one of the most popular ones.
This is due to the fact that by 2021, Argyle mine will close and it is responsible for 90% of pink diamonds in the world. By investing in them, you will diversify your portfolio and have a valuable item in your possession when the supplies are exhausted. This will serve as a fine protection from traditional market risks and give you a balanced portfolio.
Determine the budget
Diamonds are pricier than expected, and people usually get a little confused as to why they should spend so much money on something so little. On the other hand, there are those who are willing to go over budget to buy a certain diamond. While diamonds’ value will only grow, exceeding the budget may not be wise in the beginning.
Consider investing in diamonds as an investment you are planning to keep for times when you face financial difficulties or losses. Those times may never come, but spending too much too soon may lead to creating them. So start small and then slowly build your portfolio from there.
Diversify your investment
Instead of buying one expensive diamond, buy two or three for the same amount of money. But most importantly, don’t buy the same ones. This means that you can buy different colored ones, or in different sizes, and even both.
Also, try to find rarer pieces. That way, when the time to sell comes, you will be selling something more unique and desirable and not what everyone else has. For example, you will more easily sell cushion diamond than a marquise. So have in mind this when you choose what to buy.
You shouldn’t buy diamonds on your own but ask for advice from experts and consultants. Also, visit forums and do online research since you will probably encounter a community familiar with investing in diamonds. This way you will learn about other people’s experience and learn more about what this type of investment entails.
Just like any investment, investing in diamonds needs research, information and time. Take your time and gather all the data you need to make the choice that will benefit you in the future. After all, diamonds are forever for a reason.