Investing in Diamonds
On average, diamond prices have improved by more than 14 % per year for over 50 years.
Nothing else can match this track record of stable and cumulative value plus astonishing resilience during times of political instability, social unrest and financial calamities. Diamonds historically have a unchanging positive capital growth contrasting precious metals or shares with quantifiable volatility year to year.
Forget about stocks, bonds, and savings accounts, one of the smartest ways to save for your child’s future is by investing in diamonds, a stone proven to be an inflation-fighter. Many financial experts have even referred to diamonds as the next gold or platinum in terms of the increasing value and demand in the marketplace.
Diamonds are treasured in other ways outside of the obvious economic benefits, too. There is nothing more special and distinct than passing a diamond from generation to generation. Females love to own romantic pieces that have come from their mothers, grandmothers or great-grandmothers and have a long family history attached to them. While diamonds are a wise financial investment, you simply can’t put a price on the bond that it creates between family members.
You don’t have to purchase the most attractive and exceptionally coloured diamond in order to make a smart investment for your child’s future. In fact, these diamonds are very rarely traded and don’t have the same resale appeal as other basic diamonds. Martin Rapaport, founder of the Rapaport Diamond Report, recommends purchasing a diamond within the D-H colour scale and rated with an excellent or very good cut. Depending on your budget, Rapaport suggests a diamond somewhere from one to five carats. These diamonds are both easy to find and to resell.
The price of the diamond, both upfront and at resale, is dependent on the quality of the diamond. Never buy a diamond for investment purposes unless it is certified, and it is preferable to get a diamond certified by the Gemmological Institute of America. The GIA’s non-profit status as a research laboratory and strict grading standards safeguards the quality of the diamond that you are purchasing. Always ask to see the GIA certification for the diamond. Skilled diamond investors even go as far as to get a third party evaluation on the diamond to back up the GIA documentation.
When purchasing an investment diamond, it’s important to pick one that will stand the test of time. If you decide to buy a loose diamond, go for a round or cushion cut instead of a pear or heart shape, which are fashionable cuts that may not have as high of a resale value in a future market. If you decide to purchase a diamond ring, bracelet or any other piece of jewellery, be sure to choose a timeless setting. Spotless, proportioned settings will always be in style, so they are a safe choice for your investment.