Gold and diamonds are considered precious materials and they are both as precious as each other when it comes to their natural state. What this means is that refinement does not add a vast amount of value to each, making them similar in some ways.
They both have a value and they are both bought and sold for values that are determined in different ways. However you look at it, diamonds have a value, gold has a value and both are found naturally but that is pretty much where the similarities end. Gold is considered a commodity but diamonds can also be considered an investment because it’s possible for you to own them, hold them and control them. When people invest in gold, it’s a different approach that’s governed by many external factors but things are different when we consider diamonds.
How Are Diamonds Different?
When you invest in diamonds, you are likely to be investing in something that has a global appeal. Of course, this is much like gold but it’s a completely unique market but the real difference is the way in which diamonds have a low-cost entry point while Gold is experiencing an-time-high while there is also an element of volatility too, and that can have a detrimental impact on the price of gold. As investors move, the cost of gold can fluctuate and that’s all down to a herd mentality. In contrast to this, the price of diamonds does not get affected in the same way and that makes them an excellent investment that you can have in your possession. Of course, you can have gold in your possession but to have large volumes of it that’s worth a considerate amount of money will require storage but on the whole, people will often invest in gold without ever actually seeing it and that’s where diamonds differ.
Diamonds are a tangible investment that you actually own but just like gold, they can also be used in many ways. This can include the likes of inflation hedging, currency hedging and they are a great option when it comes to seeking a safe haven during challenging times for equities.
With a low entry point, it is an investment that many can make, even with minimal experience and because they hold their value. Therefore, investing in diamonds makes perfect sense. They are everlasting and provide an element of security that makes investing in them even more feasible. What’s more, the macro-economic law that relates to supply and demand leans towards an increase in the price of diamonds on a global scale. The reality is that they have also shown excellent performance through the years, and although the future cannot be predicted, this could indicate that they will continue to perform well as an investment and that’s why it’s worth considering them as an investment over gold, which, as mentioned, is susceptible to many factors that can determine its price.
Recent Comments