Diamonds: simply for style or an investment too?

03-Cushion cut center diamond, custom pave setting by Ascot Diamonds NYC, DC, Dallas & ATL

Now, more than ever, is the right time to buy a diamond. For the first time in years, diamond prices are starting to rise again.

Numerous factors play into rising prices, but among the most significant is the recent news of De Beers cutting diamond mining production. With a marked increase in demand from China and diamond supplies simply drying up, De Beers has reduced production in order to extend the life of their mines. As a result, we expect to see prices continue climbing as the divide between supply and demand widens. With scarcity comes increased value, making this the optimum time to consider a diamond even as an investment strategy to round out your portfolio.

Take a look at the remarkable figures below comparing diamonds with other, more traditional, investment options over the past ten years …

Ten Year Investment Results

Gold 274%
Platinum 216%
5.00 carat diamond (RDI) 135%
3.00 carat diamond (RDI) 74%
$ per Euro 42%
U.S. interest rate 37%
1.00 carat diamond (RDI) 32%
Yen per $ 11%
Dow Jones – 8.5%
NASDAQ – 44%

(December 1999-December 2009, courtesy of Rapaport Diamond Report, 2010. RDI is the average price per carat for D-H, IF-VS2, VG + diamonds)

Maybe these numbers will help you see diamonds in a new light. The affluent urbanites in China are paying attention to the rising value and are “buying diamonds in droves” according to a recent article in Financial Times.

Investing in diamonds might not be right for everyone, this news should also encourage those of you considering a diamond purchase to get moving!

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