Diamonds As An Investment – Guest Post
For those who believe that the world’s major economies are going to hell in a hand basket, it augurs the question of what to do with your money to firstly protect it and secondly profit from it during these difficult times.
Some of the shrewdest financial minds of our time, think Jim Rogers and Doug Casey, as well as numerous adherents to the Austrian school of economics are of the opinion that we are in the midst of economic turbulence that still has a long way to run. And with central banks printing money at a rate unprecedented in the history of mankind, interest rates at historically low levels, and very questionable methods of measuring key economic statistics such as inflation, cash in the bank is losing purchasing power on a daily basis.
So if paper money is not a place to be and quantitative easing creating distortion in the bond market, then what other alternatives are out there?
Jim Rogers is a firm believer in hard assets that cannot be produced by the printing press or clicking a computer keyboard – think gold, silver, and to a lesser extent, industrial metals such as copper and nickel. He is a very firm believer in farmland as the growing middle classes in the world’s two most populace countries – China and India – will require more and better food, and with much farmland been overtaken by urban sprawl, this sector has been neglected. Doug Casey seems to concur with Rogers’ advice.
An investment you rarely see mentioned and one that has outperformed most others over the last decade is diamonds. Investing in diamonds, particularly natural fancy color diamonds, has proven to be a very smart place to park your money.
Diamonds have a market in the tens of billions of dollars so it is never a problem selling them if required. They are easy to maintain as they never lose their sparkle and are the hardest natural element known to man. They are not subject to reporting requirements such as gold holdings and are easy to transport either in jewelry form or if placed in your pocket.
Fancy color diamond prices have appreciated in the hundreds of percent, and even in excess of 1,000% depending on the stones in question, over the past decade or so. Ten thousand times rarer than colorless diamonds, fancy color diamond prices barely flinched during the great financial crisis of 2007/2008.
Minimal downside, lots of upside, durable, easily transportable, not subject to reporting requirements, marketable, and rare – what more do you need in an investment?
Jonathan Peterson enjoys writing about investing in diamonds, and working with them day by day.