With investments in many areas on the decline diamond investments continue to rise. One of the most famous diamond consultants in the world, Martin Rapaport, has stated that there is an increase in demand for diamonds - particularly for larger polished stones. With a decrease in the value of the dollar it seems that investors are turning to diamonds as a hedge against inflation.
Large diamonds that are near perfect are the prime targets for investments. Many important wealthy people are purchasing diamonds. This is making them into a commodity. While low quality diamonds are not improving there is a huge surge in the price of high quality diamonds. Mr. Rapaport points out that the U.S. seems to be in a recession, which makes the diamond market somewhat of an anomaly. He says that diamonds can be confusing since lower to mid grade diamonds are not increasing in value at the same rate as those that are larger and of higher quality.
While many people are spending less on luxury items there are more millionaires than ever before. The wealthy people are looking for the best ways to make investments that won’t crumble with the economy. They are finding that one of the safest investments they can locate is in large diamonds. Of course the wealthy people are not located strictly in the United States. Newly wealthy people in China, Russia and India are all looking for ways to increase their investment power. Diamonds are one way that everyone seems to agree on.
Martin Rapaport is no stranger to the diamond market. He has been looked up to as an expert in the field for some 30 years. The pricing of diamonds was revamped largely in part to Rapaport’s price lists. The online price list is a huge market for diamonds with more than $3 billion dollars in diamonds and other precious stones listed each day. His expertise provides the benchmark for which all polished diamonds are traded.
It is worth noting that the market for large diamonds has drastically increased in the last year. In fact the prices for large diamonds that weigh more than 4-carats have increased almost 130% just since the beginning of the year. According to Rapaport this shows a global trend that is “to reflect the level of premiums in trading markets” Rapaport goes on to say that “there is no limit to the upward movement of diamond prices in an environment where the appetite of the wives of billionaires is insatiable”. In just the last month alone prices on precious gems have increased 25%.
Since the largest stones are the most rare they are the most coveted by the wealthy investors. The desire to have the largest and most perfect diamonds has created more demand. The increased demand continues to drive prices up even higher. Much of this increased demand can be attributed to the new wealth around the world.
Another investment that has been following a similar surge is gold bullion. This popular option is an alternate investment opportunity for those who are looking for an investment to hedge against inflation. Gold has reached an all-time high as the increase in demand for gold increases. Gold, however, is more traditional and although it has continued to increase it has not done so at the same rates that diamonds have.
Diamonds will continue to be a good investment. According to Rapaport diamonds “are a natural resource with limited supply; scarcity drives demand; it pays to buy them because value should go up; wealthy people want to own them; and they are becoming a serious hedge against inflation.” Diamond investments are something that anyone in any country can make.
Of course there are some skeptics. Some people are not sure that diamond price surges are tied to increased demand so buying diamonds now could prove to be a poor investment. Actually, however, with diamond prices continuing to increase the only problem would be when to sell the diamonds. If the diamond market were to decline then diamond sales would decrease until the market again picked up. The lesson to learn is that investors should not invest in anything if they will need to sell it quickly.
Anyone who is ready to make any type of investment should first review the market and learn all that they can about it. The diamond market is no different. Right now the upward trend shows no signs of changing or slowing down. Those who want to invest in diamonds should feel confidant that their investment is a good one. The best diamonds for investment are those that are large and near flawless. The more perfect the diamond is the better it will hold its value. The same is true for size. Large diamonds are always a better investment than smaller ones.
