Are Diamonds a Good Investment?

(sendcockpit.com) - The topic of buying diamonds as an investment has recently become a commonly debated issue. A fixed price per gram, such as the universal world price for an ounce of gold, for example, does not exist for any diamonds, whether colourless diamonds or Natural Fancy Coloured Diamonds. Each stone is unique, and no two stones are exactly the same. A diamond’s value is determined by several factors, the best known being the 4Cs: Carat, Colour, Clarity and Cut. Even the smallest differences can have an enormous impact on price. The term “investment diamonds” is used more and more often; however, because diamonds yield neither interest nor dividends, they are not a typical investment. Supply and demand also affect the price of diamonds, so although diamond prices are stable over a long period, a drop in demand can cause prices to fall. For rare colours like pink, blue, green or red, prices have increased significantly for stones of all sizes. In recent years, record-breaking prices have been paid for larger stones in these colours at the famous Sotheby’s and Christie’s auctions. Despite these record prices, however, caution is still advised because often times, those high prices were paid by professional traders who specialize in the sale of such stones. In addition, several “important” stones recently failed to attract buyers at auction.