Diamond Investment News – The Word is Getting Out

As the world’s stock markets swoon and the price of gold and other commodities hit multi-year lows, there is one investment that is standing firm during this global volatility – diamonds. Could at least part of the reason be the growing promotion of diamonds as an investment by a diverse range of media?

 

A large Canary Yellow Diamond Investment StoneA large Canary Yellow Diamond Investment Stone

Certain color diamonds are considered investment stone as a result of their price appreciation. This extremely large fancy intense yellow diamond is a perfect example 


For those in the know, diamonds have been known as a safe investment that outperforms many traditional forms of investment such as equities, bonds, and precious metals, yet now, many other mainstream media outlets are bringing this form of investment to the attention of a public starved for investments with these types of characteristics.

 

Fancy Color Celebs

 

Natural fancy color diamonds have been the long lost cousin of the diamond world – long lost at least to those not in the loop. Highly coveted by royalty and the extremely wealthy, colored diamonds are much rarer than colorless diamonds and have started to have their time in the spotlight due to them being the new “must have” accessory of celebrities.


Wherever celebrities go the paparazzi and mainstream media is sure to follow, especially when we are talking about red carpet events and significant celebrations in the life of the celebs such as engagements and births. Just think J-Lo, Heidi Klum, Beyonce, and Kate Hudson etc. – we love them, they love colored diamonds, and so the word spreads.


Not a bad deal; something beautiful that can be worn and appreciated every day yet also are a safe investment.

 

As Seen on TV (and Other Media)

 

With the advent of the Internet and a search for new forms of investment, the idea of diamonds as an investment is spreading. And due to the compelling nature of this investment it has begun to gain traction.


Investing in diamonds is now being discussed and covered by such esteemed financial media as the Financial Times, Forbes, CNBC, The Street.com, and MSN Money, as well as other non-financial media sources such as USA Today and The Globe and Mail. These outlets are interviewing experts in the field of diamonds to expose their followers to all that diamond investing has to offer.


“Celebrities are driving the growing trend for colored diamonds in engagement rings… Diamonds have always been a girl’s best friend but an appreciation of prices has Wall Street interested too,” state The Street.com  In an expose’ about fancy color diamonds.


In reference to diamonds as a form investment, MSN Money quoted diamond expert Martin Rapaport that "Supply will grow between 3% to 4%, but demand will grow 10% or maybe more," With the emergent middle classes in China and India, "you will have 100 million new consumers interested in buying diamonds, especially those getting married."”


According to Rapaport, diamonds are "a compact form of wealth."This is something you can go with that can't set off metal detectors."


Points of note raised by MSN Money included, “For an investor, what's the appeal of these of hard assets? Advocates say that diamonds offer a hedge against inflation, as well as a stake in a valuable commodity that's not tied to the fluctuations of the global equity and bond markets. And with gold down from its peak last year, some investors are searching for alternative commodities.


What's more, diamonds have outperformed equities during the first decade of the century, according to a recent study published in Finance Research Letters.“


Leibish & Co. President & Founder Leibish Polnauer was quoted on "The Squawk on the Street" segment of CNBC saying, “If you bought in 2001 a 5 carat fancy intense pink for $600,000, you have today $2.6 million. If you bought for the same $600,000 in 2001 Berkshire, Coca Cola…or Citigroup, if you have your $600,000 back today you are lucky.”


Is the media jumping on the “diamonds as an investment” bandwagon a case of the dog wagging its tail or the tail wagging the dog? Following this quote in Forbes you would have to conclude the latter: “Manson said the idea of diamonds as a physical investment is not a new idea; it’s been happening for quite some time, especially in China. He pointed to high net-worth individuals buying a single impressive stone or a small portfolio of stones, comparing these types of investors to people who buy art or fine wines as an investment.”


The resilience of the price of diamonds is subject to many factors unique to diamonds as an investment, such as their being a non-reportable asset, a highly concentrated form of wealth that can be carried across borders with impunity. However, their growing acceptance as a form of investment by a broad range of media definitely enhances their attraction even further.

 

Sources:

http://www.thestreet.com/video/11841521/color-diamonds-better-for-engagements-or-investing.html
http://money.msn.com/exchange-traded-fund/diamonds-investors-best-friends
http://www.forbes.com/sites/kitconews/2013/06/07/interview-diamonds-as-a-physical-investment-on-the-cusp-of-developing-stornoway-ceo/

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