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Investing in diamonds, only for millionaires?

Diamond has been the symbol of love and loyalty for centuries. Today, it’s also considered to be a good investment strategy, especially in times of economic stagnation or weak growth.

Most people are of the opinion that investing in diamonds is reserved for the superrich. And yet, you don’t have to have millions at your disposal to make a profitable investment in diamonds. Someone who has round about 75,000 euros in the bank can easily become a player on the diamond market and as such can achieve success with a lucrative investment.

 

The economic crisis of 2008 proves it: the diamond market weathered the storm without any problems, while the financial markets struggling. Diamond nonetheless used to stay virtually unnoticed as an investment. The lack of price transparency, the liquid market and the absence of a uniform quality standard are undoubtedly part of the reason for this oversight.

More transparency, higher demand for diamond

Today the situation has drastically changed. The market has become a lot more transparent, diamond investment funds are becoming increasingly popular and the demand for rough and cut diamonds is climbing steadily worldwide. Due to the limited amount of new diamond mines the balance between supply and demand is tipping more and more in the favour of the investor.

Experts of the American analytics bureau Wealth-X noted that there was an increase between 2005 and 2011 of more than 30% in the demand for diamond, and they are expecting another leap of 20% by 2017. This can mostly be attributed to the booming popularity of diamonds in the East. In addition, reports of increasingly high auction prices have garnered a lot of media attention and brought a lot of new investors to the market.

A reliable alternative, with the help of an expert

So even for non-millionaires investing in diamonds is a valid and reliable alternative. Investors do, however, have to take into account the four basic principles: price transparency, quality assurance, transaction costs and liquidity. It is after all important to realise how these factors influence investments.

For more information and professional guidance they can always go to a specialised company. Belgian investors can turn to the international diamond experts at BAUNAT. They would love to guide you through the process of securing a sustainable investment in diamond and would like to help you maximise your return-on-investment.