Pros And Cons Of Investing In Diamonds |
Posted: March 20, 2019 |
How about turning diamonds into your best friend? Sure, they’re a woman’s number one pal, but what about investors? Namely, you need to always stay on your toes, to experiment with investments, ideas, options, to actually try something new from time to time. Diamonds may just be the thing you need. Namely, diamonds were once a very fine and sought after investment, but it seems they have dwindled in the last couple of years. Going into detail on why this actually happened is far outside the scope of this article. However, there are certain pros and cons to consider if you want to invest in diamonds. Below you can find some more information Pro: Flexibility and stabilityDiamonds are a very simple investment. Similar to Silver, Forex, or Gold, they are a store of value, pretty stable, and easy to use. They can be used as a hedge against inflation, market crashes, currency crashes… During times of economic crises investors lose faith in standard financial systems and options. What they do really on, however, are tangible things, like gold or diamonds themselves. While the fact that they do not generate yield is not really a virtue (more on that later) it can still be seen as an advantage in certain circumstances. Namely, most often yield is taken into account when determined the value or price of an investment. However, in times of trouble, yield is not as good or useful. So while in stable times yield is a great benefit, in times of economic crisis you just can’t count on it. Pro: LogisticsDiamonds are forever, remember that. That means that their logistical costs are minimal. First of all, they’re pretty much indestructible, so no need to invest any money into maintenance costs and expenses. As long as your store it properly, you’re in the clear. Next, if you want to transport it, you can quite literally have several hundred thousand dollars in your pocket, and just walk around. While you of course have to have certain certificates, evidence, statements, and items to carry with you in order to prove their value, there is very little hassle with diamonds as far as logistics are concerned. Con: They do not generate yieldAs we’ve mentioned, they do not generate yield. This in turn makes it a bit of a strategic chore to sell. Namely, selling the diamonds quickly will lead you to losing total capital. Namely, there are too many complex issues to get under your control when trying to sell diamonds. Their price, their cut, their purity and their colour, these all lead to essentially forcing you to go to an auction house. While auction houses take on fees and a percentage from sales, they can still get you a better deal than if you were to approach the whole issue yourself. Pro: Diamonds are part of lifeDiamonds are a part of life, they stand for something the moment we see them. They are synonymous with class, elegance, and a lavish lifestyle. Furthermore, they are part of nature, created by millennia of pressure and power. No matter what you see, you’ll notice that diamonds are a wonderful element that is as fashionable as it is useful. What other investment or asset can you carry around with you? They are recognized as valuable all around the world. The moment they see one, people know this is a valuable item. In fact, they are essentially a form of international currency. Con: Problematic backgroundThere is an ethical issue that follows diamonds. Namely, depending on where it has been mined, a diamond can be a so called blood diamond. Being generated though what is essentially slave labour and criminal activity, certain unchecked diamonds can have dark backgrounds. Another issue with diamonds is that they can attract problematic attention as well. The very fact that you can carry several hundred thousand dollars in your pocket means you can be a potential target. Con: Shady marketsIn line with the previous point, diamonds are prone to being exploitative, to allowing people to con others. Figuring out the value of a diamond is no easy feat, it’s accompanied by a ton of work. You need a license professional to take a look, then to assess it, and give you a certificate. Herein lies the problem- finding said professional. There are too many diamonds out there that are fake. It’s impossible for the laymen to guest the quality and value of a diamond at a glance, without proper tools and advice. And even then, they may at best be able to notice if it’s fake, but not if it’s of a lower quality than the reported one. Therefore, make sure to consult with professionals, like those at Australian Diamond Portfolio, who can help you in making the right decision regarding every step in the diamond investment process. ConclusionAnd there you have it folks, the pros and cons of investing in diamonds. They can be an excellent investment, for the right person. It’s up to you to decide just how much you actually mind all the added work that is needed to find a good diamond, while at the same time knowing how important the flexibility and stability of diamonds is to you. And of course, there are ethical issues with certain diamonds that need to be handled appropriately, as does the safety concern that may follow.
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