Does diamond investments is the “New Gold” for Investors?

There are many good ways to invest your money these days. However, most investments present a problem. If you want something safe, you may not get much of a return. If you want the possibility of a large pay-off, you may have to take a lot of risks. Gold has always been considered an excellent investment, but today, diamonds may be the better choice, and here’s why.

Investing in gold

Diamonds
Beautiful diamond

Although gold remains a good long term investment, the market can sometimes take a dive, and that may be coming in the near future. According to MoneyWeek financial magazine, The United States and UK are expected to raise interest rates soon. Inflation may be just around the corner and this could place a dent in the gold market. However, diamonds are another story.

Diamond investments

If you decide to invest in diamonds, you are getting a relatively stable market. In fact, precious stones may increase a great deal in popularity within the next few years, for several reasons.

De Beers

For some time, De Beers enjoyed control over the supply of diamonds in the world. In fact, the company controlled as much as fifty percent of diamond production and about eighty percent of rough diamond sales. This stranglehold on the market did not leave much for the small investor. However, that has changed since the Oppenheimers decided to sell their interest in the company. When this happened, it opened the market up to virtually anyone, and that’s good news for small and first time investors.

Be careful with open markets

An open market means that you might find more con men out there today. Always deal with reputable diamond suppliers. This is the best way to keep your investment safe.

Supply and demand

Most diamond experts agree that the future supply of diamonds is not going to meet the demand. After all, there is a finite supply of precious stones, and a lot of new mines are not being discovered. As demand for these stones increases, it will naturally increase the value and that is very good for investments.

China

As China becomes a force in world trade, it represents a huge market that was virtually untapped for centuries. According to CNN Money, China (along with the US) is the hottest market for diamonds today.

On September 17, 2013, The South China Morning Post reported that China is second only to the United States when it comes to demand for diamonds. In fact, demand has increased three-fold since from 2009 to 2013. This represents an amount of nearly 23 billion dollars US.

As the country of China becomes more westernized, diamond engagement rings are becoming very popular there. According to Citigroup analyst Oliver Chen, (source buzzfeed.com), diamond engagement rings in China have only become popular within the last twenty years. A little over 30 percent of Chinese couples now use engagement rings with diamonds as opposed to virtually none, not that long ago.

Diamonds or gold?

Although both are excellent investments, recent trends point to diamonds as the best bet for the short and mid-term. Make sure to choose a good provider when you check out loose diamonds for sale and when you buy diamonds set in jewelry.

 

 

http://moneyweek.com/investing-in-gold/

http://money.cnn.com/video/news/2014/02/14/wbt-de-beers-group-ceo-phillipe-mellier-diamond-industry-valentines-day.cnnmoney/

http://www.buzzfeed.com/sapna/about-31-of-chinese-couples-using-diamond-engagement-rings-u#1pqhoco

http://www.scmp.com/business/commodities/article/1311484/all-glitters-diamonds-outshine-gold-chinese-brides