Diamond as an investment, is it a good idea?

If you followed up the development of the bond market the previous years, you know that even today the safest investments are considered risky. Also, the stock market gives us no inspiration and saving accounts aren’t profitable anymore. Real estate is sometimes considered as a good investment alternative, but there are many uncertainties: you have no cash available anymore, you are committed to your location or the tax rules can be changed…

The cautious investor is looking for years – partly due to the crisis – his resort to safe investments. In the first instance, people often think about gold. However, there are other possibilities, such as an investment in diamonds, watches, wines and luxury cars.

When investing in luxury products, there is one golden rule: the best investments are made in large luxurious and in very limited editions.

Swiss watches

For a precious chronograph you need to pay between 20.000 and 200.000 euros. However, experts consider it highly unlikely that such watches will retain their value. Watches should be purchased mainly to do yourself a favour, rather than as an investment. If you want a watch for investment, you should look for very limited quantities, for example, a tourbillon or a watch with a frame in precious metals.

Luxury cars

Is investing in a car wise? There are several exclusive models for sale, but there is no guarantee that the car will increase in value. The first years after the purchase, the value decreases the most. The more limited the edition in which the car was produced, the greater the historical value will be and therefore the more suitable it will be for investment purposes.

Diamonds

Diamonds provide security. Other than gold, each diamond is different. A diamond investment is delivered with an internationally recognized certificate that reflects the unique characteristics of the stone.

The largest diamond mines are located in Africa, Australia, Canada and Russia. All of these mines indicate that the stock is limited. On the one hand, the production of natural diamonds decreases year after year. On the other hand, the demand for these gemstones continues to increase. Especially in Asia (India and China) the demand is rising due to increasing prosperity, but also in countries such as Brazil and Russia the demand increases. The demand for diamonds is much greater than the demand for gold. So you need to find a rare quality diamond investment. Coloured diamonds for example, are very rare.

The benefits of a diamond for investment are numerous: they are portable, the market is separate from traditional markets and the market is still rising. Diamond is a good investment, whether the stone was freely bought, or processed and worn.

Author: San Meuleman
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