Invest in diamonds, invest in eternity.
Investing in diamonds has been a popular choice for people for centuries. Diamonds offer a unique investment opportunity with both practical and emotional value for people. According to a report by Bain & Company, the global diamond industry is predicted to grow by 2-5% annually, representing a stable investment opportunity.
Aside from the attractive prospects for investors, diamonds have a higher resale value and are not subject to market volatility. Diamonds are a symbol of eternity, and investing in them is like having a piece of “eternity” in your portfolio. In this article, we will delve deeper into the reasons why investing in diamonds is a smart decision.
The Rarity of Diamonds
Diamonds are one of the rarest natural resources found on Earth. Unlike gold, the supply of diamonds is limited, and this has helped maintain their value over the years. The value of diamonds has remained relatively stable over time, whereas other commodity prices have fluctuated significantly.
The rarity of diamonds contributes to their value. As diamond mining becomes more challenging and scarce, naturally, colored diamonds become even rarer and could develop into an even more valuable commodity.
The Durability of Diamonds
Another factor that makes diamonds a popular investment choice is their durability. Unlike other precious metals like gold, silver, or platinum, diamonds do not corrode or wear with time. Diamonds are exceptionally resistant and have a high melting point, making them ideal for a range of commercial and industrial applications.
As a result of their resilience, diamonds do not lose their luster or value with time. This aspect of durability makes diamonds a sound investment choice, holding their value over extended periods.
The Emotional Value of Diamonds
Diamonds are objects that possess an emotional value that is priceless for many people. Diamonds are not only a symbol of love, but they also signify achievement, strength, and success.
For instance, engagement rings typically have diamonds, and they represent an emotional connection between the two lovers. People feel great pride in displaying their diamond jewelry, and the pieces hold personal and sentimental value along with material worth.
The emotional value of diamonds makes them a popular investment choice as they are often passed down from one generation to another.
The Growing Demand for Diamonds
The global demand for diamonds continues to grow, mainly due to the increase in consumer spending around the world. According to the World Diamond Council, diamonds represent a market worth $87 billion annually. The primary consumer markets for diamonds are the United States, China, and India.
Diamonds also have industrial applications and are used in various cutting and polishing tools and as semiconductor materials. The industrial demand for diamonds is expected to increase by 4% annually, contributing to the growing demand for this precious stone.
The Resale Value of Diamonds
Diamonds have a higher resale value compared to many other forms of investment. The resale value of diamonds is determined by various factors such as the quality of the stone, the rarity, and the demand at that time.
The resale value of diamonds is one of the many reasons why they are a smart investment choice. As a tangible asset, diamonds can always be sold, and their value is widely known as they are traded worldwide.
Moreover, the resale value of diamonds has been seen to appreciate steadily over time, making it a sound investment opportunity.
The Influence of Economic Trends
Historically, the diamond market has been steady. This is because the diamond market is not directly linked to other markets, such as stocks, bonds, or real estate. Therefore, even when global economies suffer from recessions, diamonds prices remain stable.
During the economic downturn of 2008, prices for gold and other commodities fell by 30% or more. However, diamond prices remained relatively stable, which highlights the resilience of the diamond market.
The Stability of the Diamond Market
The diamond market is relatively stable and is unaffected by market volatility or political instability. As diamond prices are not subject to sudden fluctuations, they provide a practical solution for risk reduction in a diversified portfolio.
Diamond buyers have the option of investing in both colored and colorless diamonds. Investing in colored diamonds, which are rare and exclusive, offer higher returns. According to the Fancy Color Research Foundation, over the past decade, the average annual returns on fancy color diamonds have been above 10%.
Conclusion
Diamonds remain popular investments due to their rarity, durability, emotional value, and stable market. The growing global demand for diamonds, steady resale value, and the general stability of the diamond market make investing in diamonds a sound investment choice.
As the global diamond market continues to grow, investors who are looking to invest in tangible assets should consider diamonds as a wise option. Investing in diamonds provides an excellent opportunity to add a long-term, stable asset to one’s portfolio – one that carries a significant emotional value, as well.