Diamonds as Investment

[Qtr 90]

Maybe this is the wrong place to ask, but I've been wondering about this.

I know people invest in gold and platinum, but does anyone out there find diamonds to be a worthwhile investment?

Do diamonds retain their value fairly well over time?

What types of diamonds show the most exponential growth in value over a long period?

[Yosef]

Back in the late 70's during the last energy crisis with spiking commodities like oil, gas, gold, silver, etc... there was also a rush to buy diamonds of "investment grade" unfortunately people thought this meant stones like 1ct D/FL, which are of course rare... and they nearly doubled in price in less then a year.... But when demand dropped after the commodity bubble burst these stones plumetted because demand wasn't there. (most people buy 1ct SI1/H or VS2/G, not FL/D) or they'll buy 2ct VS2/G for roughly the same price as a 1ct FL/D.

So anyhow if you're going to buy diamonds as an investment, be sure it's a good value based on demand, not just what prices are currently trading at. You buy at today's price based on if you like it or not. But you buy on tomorrow's price if you think it will hold/rise in value/demand. So you'll need to do your homework.

Generally speaking something of 3+ct, VVS+ clarity, DEF or natural fancy colors are seen by many people as investment grade. But don't expect to get rich quick, these investments often take many years to reap the rewards. And with synthetic diamonds now hitting the market, and detection of synthetic diamonds still uncertain, it's hard to predict what will happen to prices going forward. But it's safe to say that the large/rare stones are in high demand and short supply now and they most likely will continue to be in the future.

[timsharpe]

Do diamonds retain their value fairly well over time?

The value of diamonds has gradually risen over the past two decades and it is an accepted fact within the industry that their value will hold. Therefore, despite economic change and how the industry evolves in the future, it is very unlikely that diamonds will ever lose their value.

[Mervyn L. Cohn ASA]

Maybe this is the wrong place to ask, but I've been wondering about this.

I know people invest in gold and platinum, but does anyone out there find diamonds to be a worthwhile investment?

Do diamonds retain their value fairly well over time?

What types of diamonds show the most exponential growth in value over a long period?

Though the other replies are valid, here's one from an old timer. Unless you invest in diamonds for an inventory of a retail store, you are assured to loose money when liquidating them. And even then you might not break even. Diamonds for the consumer is a wonderful investment in joy of ownership and appreciation of their beauty, besides ladies love them as gifts.