Investing in Diamonds Montrose CO

Buying diamonds as gifts and as jewelry is a common practice, but investing in diamonds is not for the average person. After all, the most economically feasible diamond investments still require access to a tremendous amount of capital and high tolerance of risk.

Diamonds have been notoriously difficult to sell on the resale market at a profit; in order to make money, diamond investors need to find a buyer who is willing to pay more for their stone than they did. Nevertheless, diamond investments are being viewed as increasingly attractive as a result of recent trends that suggest a diminishing global supply.

White stones outnumber colored ones 10,000-to-1 Multifaceted investments

Diamonds carry unique attributes that distinguish them from other types of investments. As a highly concentrated asset, diamonds are extremely portable and easy to have on one’s person at all times as jewelry or loose stones. Investing in diamonds also carries benefits of financial privacy and complete ownership.

Diamond values are not directly linked to stock and bond markets. Diamond prices have increased an average of 15 percent each year since 1949, according to statistics published by diamond manufacturer Ajediam on their company website.

“Diamonds do hold their value well,” Chuck Jaffe wrote in his syndicated column last December. “So long as the stone is real, it’s not going to zero like a company headed for bankruptcy.”

International demand for diamonds appears to be on the rise, especially as an increasing number of high net worth individuals emerge in the Russian, Middle Eastern and Asian markets. The emerging middle class in China is expected to create a sharp increase in demand for diamonds and other luxury goods, according to an article in The Financial Post last June.

Extremely rare stones seem to carry the highest potential for strong performance and returns. The values of colored diamonds, for instance, have roughly doubled every six to seven years during the past 35 years, Stephen Hershoff, senior executive and managing director at Pastor-Genève, said in an e-mail interview.

Furthermore, “the colored diamond market has always been an asset class that has held its value during recessions and economic downturns,” he said.

Colored diamonds are exceptionally scarce when compared to the white variety; in terms of natural supply, the ratio of white to colored stones is approximately 10,000-to-1, according to an article posted on the Pastor-Genève website last October.

Investing in diamonds, however, is a high-risk endeavor. Regardless of the quality and appraised value of the stone, an investor’s ability to reap a profit is at the mercy of what a buyer is willing to pay.

“Diamonds are appraised and graded, but prices move based on consumer sentiment,” Jaffe wrote.

Diamonds are not especially liquid, and an investor who wishes to sell his or he...

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