In times of economic uncertainty, investors have to reach for typical opportunities to protect and expand their wealth. Diversifying their portfolios with alternative investments can help investors hold on to their money even when the conventional markets dry up. Today, with the world economy on shaky ground and investors scared of losing their nest eggs, a few standout investments have been gaining popularity.Art has been even more popular than normal among investors in the past several years. Even when the rest of the economy is turning down, fine art has remained a fairly stable investment. Some investors choose to not even hang the art they own; rather, they purchase it, store it in a vault, and sell it for a profit 10 or 20 years in the future. Of course, one can also invest in art in a less personal way by purchasing stock in an art auction house or buying into an art investment fund.
Rare coins are another relatively unknown investment alternative. Investing in rare coins may sound risky or even downright silly, but it can actually be a stable long-term choice. The biggest risk involved in rare coin investment is the chance that a large number of similar coins will be discovered. If that happens, the value of your investment may decrease dramatically.
Wine has long been a favored investment of the wealthy. Rare aged wine can carry exceptional value among collectors. Investing in wine can even be a relatively inexpensive venture, provided that you have plenty of time to wait for your investment to mature.
One of the most seriously underutilized alternative investments is diamonds. Diamonds have performed consistently well throughout economic downturns and today continue to be a top choice among investors. Diamonds, unlike many other alternative investments, retain their value even when the rest of the economy bottoms out. Also, unlike some other investments, the supply of diamonds is finite. As fewer valuable diamonds are found each year, the price of diamonds keeps going up.
The value of diamonds has been climbing even higher in the last decade. Just five years ago, the average per-carat price of a ten-carat colorless diamond was $70,000. Today, it is more than $200,000 per carat. This huge upturn in value has prompted countless investors to tuck away some of their wealth into diamonds.
Some investors choose to take the most direct route and purchase loose diamonds from a dealer. These diamonds can be set into jewelry and worn with no decrease in their actual value. Other investors simply put their money into diamond funds, which requires less direct interaction on the investor’s part but also requires a measure of trust in the fund managers.
Most funds that invest in diamonds specialize in rare stones, such as large or colored diamonds. Pink and blue diamonds are especially prized. They are exceptionally rare and exceptionally beautiful, and their value shows no signs of decreasing in the foreseeable future. Fewer than 200 flawless, colorless diamonds over five carats are found each year. Far fewer colored diamonds are discovered annually, making them a highly prized commodity.
One of the reasons that diamonds are such a great investment choice is their almost-guaranteed rarity. It is highly unlikely that large new caches of natural diamonds will be found outside of known diamond mines, so there will be no market flooding in the future. Diamonds are rare and getting rarer every year. An investment in single stones, fine jewelry, or diamond funds will almost certainly grow in value as the world’s supply of diamonds decreases. The value of top-quality diamonds has been known to increase by as much as 50 percent in one year.
Another draw for diamond investors is the liquidity of the investment. Diamonds can quickly and easily be sold on when required, making it simple for the investor to recoup their initial input and often make a profit.
To make sure you get the most out of your diamond investment, only purchase loose diamonds that are certified by a trusted gemological authority. Only invest in diamond funds that are recommended by trusted sources. Diamonds are considered a long-term investment and require the investor to have a working knowledge of the gemstone market.
As with any investment, consider all possible outcomes before deciding to part with any of your money. Don’t invest any money that you can’t afford to lose, and be prepared to do your research before choosing the best investment for your particular situation.
Although the economy is currently looking grim for many investments, alternative investments are holding their values well. Diamonds, especially, are rising in value even while other investments are falling. An investment in diamonds today may very well lead to a tidy return in the future, regardless of what happens to other commodities.
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