Is Investing in Diamonds a Good Idea?

Diamonds have, for some time now, been a very popular investment commodity for those looking to build up an investment portfolio. While some aspects of the trade have been controversial, the last several decades have seen regulations and working conditions improve dramatically. It is now possible to invest in diamonds with the certainty that the money will go to companies who behave ethically.

Why Diamonds?

There are many reasons why diamonds have become so popular as investment opportunities, particularly for those looking to hedge their bets alongside other commodities such as gold and oil. For one thing, diamonds themselves are small and therefore easy and cheap to transport in bulk, as well as versatile in terms of its potential functions for buyers, with potential applications in the jewelry industry, as well as an important role in the construction industry.

Strong and Durable

Diamond is also incredibly tough and durable, hence its use in construction. It is the hardest naturally occurring substance on earth and is all but immune to both erosion and physical breakages. This makes storing them easy, although a large collection would require some relatively beefy security.

Inflation Proof

As with most physical commodities, diamonds are inflation proof. This means that while the value of currencies may shift relative to one another, felt by consumers as changes in theprice of common goods, the value the market pays for physical commodities is usually unaffected. Note, though, that there are other factors which can drastically alter the value of physical commodities and they are not without risk. Diamonds are particularly easy to move and store, which makes them an attractive and secure form to hold one’s assets in.

Use Them While You Have Them

Another reason that some are attracted to diamonds as an investment opportunity is that a diamond, unlike many other commodities, can be used without depreciating in value. The durability of a diamond means that one sat in a vault in a bank is worth just as much if it is taken and placed in a diamond ring or similar piece for a time. The ultimate buyer can always have it removed from any fittings and repurpose it themselves.

It's A Tangible Object

Psychology also has a role to play in choosing diamonds as an investment opportunity. Unlike many other commodities, such as oil, and stocks and shares, bonds, etc., a diamond is something you can hold in your hand and actually see in front of you.

Diversification

The most important consideration when deciding whether to invest in diamonds is the diversification opportunity. Diamonds come in a wide range of qualities and types.Different types of a diamond will have different values and so as an investor, you will minimize your risk by investing in multiple types.

Diamonds make for sound investments and are a fantastic way of holding your assets. Diamonds are small and all but indestructible, meaning that even a small one can represent a significant portion of an individual’s wealth.