Diamonds have always offered investors an opportunity to invest in a commodity that is unique and extremely rewarding. You only have to look at the performance of diamonds over the last four decades to see for yourself just how well they perform.
When we consider other investments, many other forms of investment suffer from volatility and that can cause problems for investors. The likes of gold, which is currently at an all-time-high, can see a downward trend in its value and that is influenced greatly by the fallout from erratic equity markets further compounded by investor herd mentality.
Diamonds are considered to sit outside of many equity markets and that’s a positive as it means that they can remain a stand-alone investment which means that they avoid the problems that come with traditional market volatility.
The Knight Frank Wealth Report
Diamonds come in many shapes, sizes and styles, the report from Knight Frank has identified through its Luxury Investment Index that diamonds are considered an object of desire, which means as an investment, they are likely to hold their value and increase should demand rise for them.
In recent years investment in coloured diamonds and in particular, yellow diamonds was boosted when an initial decline in prices made them more accessible to end clients, pink and blue diamonds also performed exceptionally well. Knight Frank found that diamonds performed well on the retail side of things while auction prices were low as a result of inferior quality, proving the importance of ensuring you follow expert advice and guidance when it comes to purchasing and selling diamonds.
This further supports the reality that diamonds are a solid investment because they are likely to increase in value. As demand is likely to increase, as proven by the Knight Frank report, then the price is going to increase. Amongst all of this, what is especially important is the way in which diamonds are considered a safe investment.
Offering both an intrinsic and sustained value accumulation capacity, studies project that diamonds are likely to increase in price in the coming decade and continuing the upward value trajectory which can be traced back for over 60 years. Furthermore, the global mining industry is producing an average of around 125 million carat gemstones each year and diamonds make up part of this. This is a figure that is far less than it was back in 2007, where it stood at 168 million carat, proving that a decrease in supply and a depletion in mining capacity is going to have a positive impact on prices. Therefore, there is no denying that investing in diamonds is a move that is highly capable of providing excellent returns with low volatility and easy market entry and exit.
In 2019, the total value of the diamond jewellery market worldwide amounted to $78 billion!