DiamonDs: the new investors’ Best Friend As the global production of diamonds declines, this precious stone is becoming the new investors’ best friend. The production of loose diamonds from mines in Russia, Canada, and Africa, some of the world’s largest diamond producing countries, continues to decline. Meanwhile, the demand is rising, particularly in China. This makes them a valuable commodity investment with potentially higher returns.
Like other luxury goods, the wholesale price of loose diamonds continues to increase. Their price tag surge in the wake of the 2008 collapse of the Lehmann Brother, a big financial firm in the US. Rich investors diverted a portion of their capital into highly portable and non-monetary assets, like diamonds. From 2009-2011, the value of diamonds rose by 70 percent.
Experts suggest that the declining global production of diamond will lead to a shortage, which will make the stones even more precious. The current prices of diamond will stabilize this year, but will boost in 2015 through 2020. There are many factors that will affect the price of diamonds. These include the slow recovery of the global economy and the melting of the stockpile of De Beers, a group of companies that dominate the diamond industry. Other
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factors include the failure of the mining industry to discover new deposits and the growth of the diamond-buying habit by engaged couples in China.
Engagement-ring buying is just starting to become more popular in China. According to reports, 62 percent of engaged couples in Shanghai now buy a diamond ring. This is roughly double the 33 percent rate in the 1990s. In Beijing, 40 percent of couples buy an engagement ring.
According to experts, diamonds appeal to investors because they offer a hedge against inflation. They aren’t tied up to the fluctuations of the bond market and global equity. Diamonds are also easier to transport than gold. A selection of quality stones weighing 3 kilograms is equal to as much as 100 kilograms of gold. As gold slowly falls from its peak, investors are searching for alternative opportunities. The limited supply of natural colored diamonds and their increasing prices make them a more valuable asset.
http://www.discountedloosediamonds.com/ http://www.miningweekly.com/article/diamonds-around-the-world-2007-06-08 http://www.foxbusiness.com/personal-finance/2013/09/24/is-investing-in-diamonds-smart-or-foolgame/
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