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Diamond investment is not a new form of investment. It exists long before our time. Collecting diamonds and rare jewels has always been a wealth keeping secret of the royals and the riches. Diamonds and gems are signs of honour, national pride, luxury, power and utmost wealth. It portrays a nation’s strength and stability. The most exquisite and large gemstones are always treasured and kept by the most powerful ones. Unlike stocks, bonds or derivatives, diamond as an investment has existed for centuries for the affluent because:

• Adornment and Appreciation

  Diamonds can be worn enjoyably and adorned while they appreciate in value. They have intrinsic value just like gold and land. During financial turbulent times, while stock and real estate market prices drop, diamonds rise in value. Investors can also build jewellery with the invested diamond to enhance its collection value.

• Currency and Portability

  Diamonds are the most concentrated form of wealth in the world and millions of dollars can be transported from one place to another discreetly and swiftly. Although it is not commonly known that diamond is a widely acceptable form of payment in any trade transaction, its value is non-refutable globally. With proper certifications, diamond owners can liquidate their possession in any countries. In comparison, investors cannot turn their share certificates into cash when they travel.

• Insurance and Family Asset

  Many women collect diamonds and high quality gems as runaway money, or security money, so that if they are ever deserted by their husbands, they can turn their diamond possession into cash for security. Diamonds are also seen as intangible form of assets of which families can pass down from generation to generation or from one family to another.

• More room for new investors

  In the old days, diamond investment is only accessible by a small niche of professional diamond traders who work secretively within the trade. With globalization and the accessibility of internet, many amateur investors are learning skills of the diamond trade from diamond investment advisors to diversify their investment portfolio. Given that the number of diamond investors is still relatively narrow worldwide, there are a lot of investment options for diamond investors.

• Open pricing

  Unlike other commodities where prices are subject to market fluctuations, diamonds are indirectly controlled by a universal price report, commonly known as Rapaport Diamond Price Report, which states the weekly average market prices for each type of diamond. As a result, diamond prices are generally standardized across all continents and diamonds’ values are unified all over the globe. Investors do not have to suffer geographic price difference when liquidating their diamonds.

• Perpetual existence

  While many investment commodities can decay or depreciate in value, diamond is a stable and steady investment. They are unaffected by atmospheric vagaries, environmental changes or other pollutants. Diamonds are the hardest, oldest and most durable substance, capable of standing against erosion or loss over time. Diamonds are still diamonds with the passage of time. As oppose to cars, technological devices or wines, they are non-degradable and can appreciate in value with time, offering stability, security and value.

• Physical closeness

  Keeping your diamond investments safe and sound is no easier with diamonds. All you need to do is to put them at home or in safes and they will grow in value. The physical closeness is only offered in diamonds and not any other investment tools.

• Scarcity

  On average, 80% of the diamonds extracted are non-usable. The remaining 20% of extracted diamonds are used for making jewellery but only a mere 5% of the 20% of cut diamonds have a weight that is more than one carat. Diamonds are associated with memorable life events such as weddings, anniversaries, births and celebration and they connote romance, love, strength, power and rarity at all times. Many crave for diamonds, especially the burgeoning upper-class from developing economies like China and India. Once diamonds become their possessions, they refrain from selling them which create an even stronger shortage.

• Security

  Prices for diamonds have risen at an average of 15% every year since 1949. Given that diamonds are natural resources of the earth which may run out one day, their values goes up as demand increases and supply decreases. In times of hyperinflation when all commodities rise in prices, diamonds, along with other intrinsic assets such as gold and land, increase in value, rendering diamonds as a hedge against inflation. While stocks and bonds are subject to political risk, operation and liquidity risks and market fluctuations, value of diamonds are not directly linked to stock and bond markets. Fluctuations in stocks and bonds will not affect value of diamonds directly.

• Tax-free

  Diamonds can condense a large sum of wealth to a small item. Investors can enjoy not having to pay capital gains tax or possession tax for owning diamonds as diamonds. Procuring and acquiring diamonds in Hong Kong also render the benefits of tax-free trading. Diamond investment has been a long time wealth gaining channel for the riches and is gaining increasing popularity.