Diamonds are an excellent store of value, and are growing in popularity, namely fancy coloured stones. Auctions continue to set records for rarity, and investors continue to diversify into portfolios of diamonds. But despite the innate value, diamonds are often perceived to be reserved for the role of memory-making. This is in large part due to
- Large information gap on diamond pricing and high margins
- Dispersed knowledge base and fragmented markets
- Many intermediaries inflating prices
- Comparative ease-of transaction in precious metals & rise in alternative investments
In spite of large hindrances, prices of diamonds as measured by indexed rough and polished stones, are still near multi-decade highs and projected to climb for years to come as demand outstrips a declining pace of production.
When investing in a diamond, though you can leverage the tailwinds of a bull-market, it is also important to consider many factors like the non-linear relationships between weight and price as well as colour and price.
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