Diamonds, the gems that have symbolized love and marriage for decades, are beginning to attract wealthy investors as a commodity investment with potentially high returns.
Negligible yield on fixed-income investments and volatility in the equity markets are driving the search for a relatively stable investment that can pack some punch in returns. The wealthy have been turning to hard assets they can enjoy, including jewelry, art and even collectible cars. Investing in diamonds is a natural alternative.
Until recently, diamonds were off the radar screen as a pure investment for a variety of reasons, including lack of price transparency and a liquid trading market, as well as difficulty in establishing uniform standards of quality among stones.
“Each stone is very unique,” For the most part, “An ounce of gold is an ounce of gold, but it’s not like that for diamonds.”
But with increasing global demand for the gem, companies are emerging with plans to replicate the success of gold and silver by developing diamond-backed exchange-traded or mutual funds.
Until the Securities and Exchange Commission approves such a fund or ETF, U.S. investors are largely limited to buying and selling physical gems, typically through a dealer. But whether considering a fund, ETF or physical ownership, “it’s not a sure bet” to get involved in the diamond trade unless you know what you’re doing,This is where RockFinders comes in to play, to educate our clients in the aquistion process.
John Bassett
