There are various assets investors can add to their portfolios. Experts consider commodities and precious metals safe, but diamonds have resurfaced as a valuable asset.
The Geological Institute of America made a forecast of laboratory-grown diamonds rising to USD$100 billion from its current value of USD$20 billion. The demand continues to grow in the United States, and the United Kingdom is experiencing a growing popularity in owning luxury items.
If you’re still wondering if diamonds are worth the investment, here are five reasons you shouldn’t miss out.
The Demand For Diamonds Is Growing
The prices of diamonds have remained significantly high since 1949. The demand for precious stones has increased in international markets such as Asia, the Middle East, and Russia.
Natural and flawless diamonds are rare, resulting in high prices since they’re the epitome of high-class jewelry. Diamonds have also found some use as components of precision devices in mirror and lens manufacturing, glass drilling, and other applications. Due to the growing demand for these pieces of equipment, the demand for diamonds has increased.
Diamonds Are Rare Commodities
The popularity of colored diamonds continued to be in demand for 30 years. If you’re considering colored diamonds, they’re highly prized for their rarity. One factor that makes diamonds valuable is their color. While red and blue diamonds are the rarest, you can also get a fair price for green, orange, yellow, and pink diamonds.
Colored diamonds are so rare that they are only found in a few mines worldwide. They only make up a small percentage of the entire production of precious stones. Experts said that colors such as violet are so rare that most diamond companies will never have the chance to see their actual appearance.
The variety of colored diamonds also has no fixed price. Auction houses value their price based on what auctioneers pay for them. Color is also a factor that determines their prices since the supply of pink diamonds, for example, has stunted. The reason could be that the Argyle mine, responsible for producing the most valuable pink diamonds in the world, announced its closure in 2018.
Its Durability Is Unmatched
Diamonds remain one of the most durable objects and the hardest mineral on the planet. They score 10 out of 10 on the Mohs hardness scale. Their ability to withstand pressure, wear and tear, and tarnishing makes them an essential part of the jewelry industry and as an industrial raw material for various applications.
Those who collect diamonds, whether as a standalone stone or jewelry, know that diamonds last forever with the proper care. Diamonds aren’t also subject to market volatility. Inflation and other economic considerations don’t affect them. You’ll find that investing in pink diamonds or other colored diamonds is worth it, even when given as a timeless gift to a loved one.
Diamonds Are Portable
Another similarity diamonds have with precious metals is their portability. Like bullion gold and silver, diamonds come in small sizes that are also valuable. Smaller diamonds mean you can bring them anywhere you go. Be warned—always store your investments in a place where only you know.
If you compare that with 45 pounds of gold in terms of value, you get over USD$87,000. Their compact size frees you from the need for expensive storage services. You can keep them at home inside a small safe or in a safety deposit box at the bank.
Remember that when you sell them, you must pay capital gains tax. The Internal Revenue Service (IRS) still treats diamonds and diamond jewelry as capital assets. But you must buy your diamonds from a certified dealer to check their authenticity and you don’t waste your investment.
Multi-Function Asset Class
Many individuals consider colored diamonds or jewelry with colored diamonds treasures. They serve as investments, gifts, and wearable accessories. Colored diamonds are very scarce, which is why their value remains high.
Even when worn and the wearer enjoys them as an accessory, this won’t decrease their value. Since the start of the 21st century, colored diamonds have received higher market value than colorless varieties.
Diamonds have been considered valuable since time immemorial. Today, diamonds have a high market value because of their durability, industrial applications, and rarity. Many consider they are considered multi-function assets. But if you genuinely want to invest in diamonds, it’s clear that colored diamonds are the most valuable. If you come across them, they’re especially worth your investment.