Potential Investment Idea – Diamonds

I got a call earlier this week from a fellow who works for a diamond brokerage firm. I gave them my contact information when I went to a resource conference earlier this year. He wanted to tell me that their Vancouver office is holding a seminar later this month about investing in diamonds. Fancy colored diamonds in particular. I thought it could be interesting so I agreed to attend. I plan to learn more about what their company does, and the diamond business in general. It should be fun 😀 After our phone conversation I poked around the internet a bit to learn more about this rare commodity and found out that many investors view colored diamonds as a form of alternative investment. I love learning about alternative investments because it broadens my perspective as an investor.

13_03_coloreddiamonds, diamondsI’ve only done some preliminary research on the topic but from what I’ve found out so far the price of an average grade, colored diamond have doubled to tripled over the last decade or so. Minimum investment through a broker is about $10,000 depending on what you’re looking for. You can invest in diamonds in other ways too, like buying them from established online wholesalers or various retailers. But because of the markup in stores many investors buy rare diamonds through brokers. There’s also news about a diamond investment fund or ETF but I don’t know much about those.

At this point I don’t know if investing in diamonds is a good idea yet.  They say diamonds are forever. But are they a dependable long term investment or do they simply represent a silly market where rich people pay for overpriced shiny rocks that don’t have much intrinsic value in the real world? Well that’s what I’m going to find out 😀

I’ve gathered a few Youtube video links below about investing in diamonds in case anyone is interested. Sorry about the poor quality. Please keep in mind that these clips may be very biased so as any prudent investor should do, take any promotional talk you hear with a grain of salt and always do your own research before making important financial decisions. That’s exactly what I’m going to do in the next few weeks, more research.
Are diamonds a safe investment? 4 min
Diamonds – Investor’s new best friend 2.5 min
Investing in rare colored diamonds 8 min

Random Useless Fact: The Average teacher salary in Switzerland in 2010 was $112000 per year

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03/14/2013 4:52 am

Went to silvergoldbull.com after seeing your tweet on gold prices and saw they now sell colored diamonds !

those are expensive !

My Financial Independence Journey
03/14/2013 10:16 am

Interesting, but I’m always concerned about investments without any real fundamentals behind them. Do you establish a limit on how much you’re willing to invest in commodities like gold or diamonds?

03/14/2013 11:47 am

I’ll be interested in hearing what you learned. I like the idea of alternative investments, but I don’t think gemstones would be one I would be comfortable with.

03/15/2013 11:13 am

There’s only a certain group of people who will want to take that pretty diamond off your hands. Diamond’s liquidity isn’t the best. Hard to find buyers in my opinion.

Bet Crooks
Bet Crooks
03/17/2013 6:31 am

I don’t think diamonds are an investment. They’re a gamble. The price of diamonds is kept artificially high be deBeers and that could end at any time. Used diamonds have a stigma, too, as people figure if someone got divorced/died they don’t want to wear that same bad-luck rock on their finger. If you do take the gamble, be careful not to buy jewelry. The re-sale value of jewelry is very low compared to the initial price. If you bought unset stones you’d have a better chance. I’d be very wary, though. Diamonds, even coloured diamonds, are not particularly rare. And with the campaigns against blood diamonds, you might find the market softens or even collapses. Think what happened to fur coats.

03/18/2013 12:45 am
Reply to  Bet Crooks

I think in terms of risk diamonds are one of the highest out there. Only certain types of gemstones, typically 3 carats or larger, have appreciated significantly over the last few decades driven up due to questionable business practices by a monopoly. What got me interested is they’re saying some diamonds like the ones found in the Argyle mine in Australia have special properties that aren’t found in any other place on earth. And since the mine is scheduled to shut down production in 2018 some people are willing to pay a premium for its diamonds. Sounds like speculation doesn’t it. What if they discover another diamond mine in the future with even more rare properties. Maybe the diamond industry is even in a bubble right now, I’m not sure. I like you’re idea of unset stones. If I do gamble in this space I will buy a colored diamond that’s not already on a ring 🙂 That should help keep its value at least.

03/17/2013 8:01 pm

Interesting! I’ll be looking forward to hearing what you’ve learned after attending. I’ve heard a lot of what Bet’s said before, too. But I’m not nearly as educated about it.

03/18/2013 12:53 am
Reply to  femmefrugality

Neither am I right now. Hoping to learn something new next week. Diamonds are created inside the earth over many years and it’s pretty cool from a scientific perspective to think that a piece of solid matter that was once buried in the ground when dinosaurs roamed the earth can now be held in the palm of your hand. Looking at a diamond is like looking into hundreds of millions of years of history on our planet (^_^) Nothing else on earth can last that long in a stable form. No wonder they are crazy expensive lol.

09/12/2013 10:12 pm

So far people used to invest in the various commodities like the gold, Real Estate etc. But now the most admirable investment to the various people is diamond. Diamonds are considered as the most potential investment and is very well liked by the people to invest in.

Owning Diamonds
Owning Diamonds
05/07/2014 9:33 am

Great post! Been reading a lot about investing in diamonds. Thanks for the info here!