How well do diamonds hold their value

Diamonds as an investment - a flawless investment or a game of chance with large scratches?

The majority of investors choose classic products such as overnight or fixed-term accounts in order to increase their money. However, especially in times of low interest rates, many think about investing in stocks or funds. But beyond the classic investment products such as stocks or real estate, there are lucrative opportunities to invest what you have saved. So it is no coincidence that supposedly exotic investment products are attracting increasing attention - such as diamonds. The gemstones have become much more popular as an investment in recent years. Decisive for a diamond are weight, cut, purity and color, among other things. In addition to the purely visual appeal of the stones, there are also other, solid reasons to buy diamonds - because the prospects are good. It is important for investors not to be ignorant of buying diamonds, but to get detailed information in advance. Certificates such as the GIA certificate provide information about the origin, quality and authenticity of a stone, for example. This protects inexperienced investors from overpaying when buying diamonds.

Diamonds as an investment: these are the advantages

In the past few years only a few new diamond mines have been opened, but at the same time the demand for the stones has increased. Particularly in the emerging world powers China and India, where the demand for gold remains high, the demand for investment diamonds is increasing. Of course, this has an impact on the price. The price development for diamonds has seen one direction in particular in recent years: upwards. Another advantage of diamonds as an investment is the stability of the market. This is hardly subject to fluctuations or external effects. In addition, the market is very small and is almost exclusively influenced by direct trade and the needs of the jewelry industry. In the long term, diamonds can be a good choice as an investment, as many experts assume that prices will rise steadily with only short-term declines. The advantages of diamonds as an investment at a glance:

  • Demand rises faster than supply - and the price rises.
  • The market is stable, small and there are only a few influencing factors.
  • Particularly with long-term investments, a good return can be expected from diamonds as an investment.

These are the disadvantages of diamonds as an investment

But even when investing in diamonds, not all that glitters is gold. Each stone is unique and there is no single price for a specific weight. The diamond price is therefore practically set by the dealers; there is no official rate. As a customer, you can get an overview of the price situation for diamonds - there is, for example, a “Diamond Price Index” which is determined from the average prices at dealers - but it is not comparable to the uniform gold price set on a daily basis. Another disadvantage of diamonds as an investment is that they are not suitable as a short-term investment, because the trading margin for diamonds is quite large. If you want or have to turn your acquired diamonds into money quickly, discounts of 30% are not uncommon. There are also a few black sheep among the dealers, so when buying diamonds you should pay attention to the reputation of the dealer. In addition, a certified diamond is always preferable to a non-certified one. The disadvantages of diamonds as an investment at a glance:

  • The determination of the price of diamonds is not strictly regulated and is often not very transparent.
  • In the case of short-term resale, high price discounts are to be expected.
  • There are always cases of fraud when selling diamonds.

Investing in personal loans:

Diamonds as an investment: not flawless, but interesting

As a capital investment, diamonds can be an alternative to other financial investments. To do this, however, certain requirements must be met. For example, it is absolutely advisable to view the stones as a long-term investment. Anyone who may need to get the money invested in the short term is much better off with other investments. Diamonds as an investment are definitely an interesting option for long-term investors. Many experts believe that prices are likely to rise in the coming years. When investing gemstones, in addition to choosing a reputable dealer, you should of course also pay attention to aspects such as purity and color of the diamond. Diamonds as an investment must of course be kept safe, for example in the home safe or in protective packaging with a built-in microchip. Switzerland is also a pioneer when it comes to buying diamonds. There you can not only purchase the gemstones without any problems, but also have them stored directly. For some years now, anyone who wants to invest in diamonds without buying stones directly has also been able to invest in funds that specialize in the diamond market - diamond ETFs are also being planned.

Investing with diamonds

  1. Weight, size, cut and clarity are all critical to the value of a diamond.
  2. Diamonds are particularly suitable as a long-term investment.
  3. There are few factors that can affect the diamond market.
  4. The “Diamond Price Index” gives an overview of the price situation on the diamond market.
  5. You should be well informed before investing, as there are always fraudulent cases when trading diamonds.
  6. When buying diamonds, you should pay attention to certificates from institutes such as GIA, IGI or HRD.