Diamonds: A good investment

By Colin Stevens

The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. The world economy will experience massive growth over the next decade. More people will accumulate more wealth than ever in the history of mankind - millions of new middle- and high-class consumers will create unprecedented demand for diamonds and diamond jewellery. But the quantity of natural diamonds is limited and natural quality diamonds are very rare. Prices will rise to unexpected height and the long-term future for diamond prices is bright. For example, the number of middle-class households in India and China is forecast to leap from an estimated 216 million this year to 469 million about US $200 billion is estimated to be spent on fine jewellery in 2014.

Gold versus diamonds investment

Gold is not as rare as diamonds, which are a thousand times more rare. There is more gold exploitable at the earth surface and it is a long time precious metal, since Inca time. Gold speculation, ie. trading gold without the actual goods, makes the metal exchange volatile and speculative. The high degree of rarity of a diamond makes up its value. In addition a diamond has a high value for its very low weight, it is easy to transport. Obviously, you will need a reliable source to purchase your diamond - a diamantaire who is able to guarantee a buyback at the exchange rate of the day.

The best investment in diamonds is to wear diamonds in diamond jewellery; it’s easy to trade in case one needs cash, but buying diamonds at true wholesale prices as an outstanding long term investment strategy.

The world production of premium cut diamonds in D Colour: Exceptional White + (D) Clarity: Loupe Clean (IF), Weight: from 1 carat to 1.39 carat is fewer than 900 carats per year. That means that, all together, there are only 750 stones between 1.00 carat to 1.39 carat D Loupe Clean available per year for the whole world's production. To produce these 750 diamonds, the mining companies have to dig more than 800,000,000 tonnes of Kimberlite (the rock in which rough diamonds are found).

Garet Penny of De Beers stated in November 2008 that, if we continue diamond mining at this rate, within 20 years the world’s supply will be exhausted.

Colin Stevens

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