We are constantly bombarded with so many ways to invest money – and most often, it will cover stocks, shares, bonds, and, more recently even cryptocurrency. We know that real estate can be a good investment if you have the drive to turn a property into something people can rent or flip and make a profit.
But what about other things? Gold, silver, and other precious metals. Diamonds, rubies, and precious gemstones, as well as designer bags and shoes, all hold value long after they are first purchased. Yet what is it that makes a diamond stand head and shoulders above the rest when it comes to investments?
Coloured diamonds have been making big waves in fashion, but also in terms of investments – but there is nothing like a classic 5 carat diamond ring. if you have been thinking about making investments yet the idea of watching the percentages on a screen isn’t your idea of fun, here is what makes diamonds a great option.
WHAT TO LOOK FOR WHEN PURCHASING DIAMONDS
There are no bad diamonds, but if you want the best of the best, then you are going to want to look for the four C’s: carat, clarity, cut, and colour. The carat should be the biggest you can afford; the bigger the carat, the higher the value. The clarity means there are little to no surface defects or little to no blemishes. The less there are, the better the clarity. You can’t see this with the naked eye, so an appraiser will need to take a look for you.
Colourless diamonds are called white diamonds, but many diamonds come with yellow, pink, or blue hues. These are typically more expensive, and their value changes based on the depth of the colour. The cut is crucial. However, it is based on craftsmanship – the cleaner the cut, the better the value.
WHY DIAMONDS CAN BE A GREAT INVESTMENT
Unlike gold, which tends to move with other prices, diamonds move up and down in value based on trends. When diamonds are in fashion, their value increases. There are also other factors that will impact the value of the diamond.
DEMAND
Have you ever heard the phrase – diamonds are a girl’s best friend? Well, that phrase and the person who was seen coated in diamonds made them something to covet. When celebrities are seen with specific coloured diamonds or a unique cut or diamond, the demand for those pieces rises rapidly.
When demand goes up during periods like Valentine’s Day, the festive seasons, and the wedding season, the price rises just before, too.
SUPPLY
The growing synthetic market has meant that there isn’t a lack of supply right now – and there might never be with diamonds in general. However, for a natural diamond, people are still willing to pay more.
ESTABLISHED
What makes diamonds and gold a good investment is that they are well-established in the marketplace. There are rarely any uprises like stocks and shares or newer investments like cryptocurrency. And due to that, the prices have steadily risen for the last 30 years, which experts believe will continue.
MOVEABLE
You move, they move. You can wear a diamond, for example, and take it everywhere with you, or if you travel a lot, you can take it with you. They are portable, which means transportation is possible.
VALUE RETENTION
The only reason you would need to sell a diamond at a lower value than what you purchased it at is if it has been damaged or you are trying to get a quick sale. Diamonds hold their value for years. What’s more, coloured diamonds have no fixed price, which means their value tends to sit much higher, and the value is determined by the buyer.
DURABLE
Diamonds are one of the most durable things on the planet, so damaging this asset would take a lot of work. Unlike things like classic cars, which are susceptible to rust – diamonds will stand the test of time.
PRIVACY
Many other investments like real estate and even stocks will be issued with certificates with your name on them. If you buy a large diamond, the only person who knows you have it will be you and the person who sold it to you. It makes this a highly private investment – and they don’t go on your tax returns either.
Diamonds are a great investment, and you don’t need to buy large ones straight away. Start by investing in smaller ones and over time build a stash. If you are exploring the world of investments and want to find the right type for you, read more here: WHAT IS SOCIALLY RESPONSIBLE INVESTING?
