Motivations to invest in diamonds

Why investing in diamonds is not only of significant interest to investors, but also to the general public.

15 March 2016|Diamonds Investment

Motivations to invest in Diamonds

“There is so much new wealth around the globe and wives want in on the action – and if they can’t get their hands on big stones, then the price will only go up.“ – M. Rapaport, chairman of Rapaport Group

When the Stock Exchange is tumbling and the Real Estate prices are too high, diamonds are becoming more and more popular as an alternative investment. Today, investors are turning to diamonds for their long-term value, as well as their asthenic qualities.

However, this alternative way of investing is not only of significant interest to investors, but also to the general public and here’s why:

1 Price stability

As shown in the bar chart below, polished diamonds have very little price volatility in the past 30 years compared to other precious metals. In contrast to silver and gold, diamonds are not easily affected by economic change. This results in better price stability, as we witnessed. 

motivation

2 High value per unit of weight

The value of a diamond is based on its weight in ounces and on its quality. Thanks to the high value per unit of weight, diamonds are worth about 1800 times more than their equivalent in gold. This means that you could sell your two houses and cars and just put it in your pocket.

3 Above-market returns

As the current interest rate is close to 0%, polished diamonds have the potential of generating above-market returns.

4 Scarcity

The supply of unique pieces such as big sized diamonds or natural fancy color diamonds is already limited and they will become even rarer. The current mines are all ageing, and there haven’t been any new big mines discovered during the past 20 years, which means that the natural supply of qualitative diamonds is decreasing. The scarcity of the diamonds will result in an increasing value and drive the demand for investments in diamonds.

5 Emotional touch

When you buy a diamond, you buy something tangible and solid, instead of another line in your bank statement. Not only it’s the most rare stone to exist in nature, but it’s also the hardest, therefor it’s here to stay and won’t break. A polished diamond is a piece of art and craftsmanship. It takes weeks to polish a diamond perfectly as it requires a lot of precision and focus. And last, when you invest in diamonds, you invest in your family heritage, your family legacy.

Van Eyck Jewelry hosts many presentations about investment in diamonds in different forums. If you would like to know more details about or next seminar, don’t hesitate to email us at info@vaneyck-jewelry.com.

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