Diamonds, even more than gold, have always attracted a lot of charm in men. It will be for their shimmer, it will also be because it is the hardest material in nature it has been that have always been at the center of the attention of the rich and noble.
As with gold, diamonds have their value to the mining difficulty, in practice they keep a high and stable price because they pull out very few. This makes the investment in diamonds particularly suitable to be used as capital protection from negative economic and political events.
As is the case for every financial asset, there is an official listing in this case in the New York, London and Antwerp stock exchanges. Of course diamonds, as well as all other raw materials, are quoted in US dollars.
All diamonds should be followed by a certificate issued by a gemmological institute that attests to its characteristics, or iussed from a commercial company where a gemmologist, certificated from one of the main gemmological institute operates.
In particular, certificates must provide information about the color, purity, cutting and weight of the diamond in question.
The most authoritative gemmological institutes are surely:
IGI (Italian Gemological Institute)
HRD (High Council for Diamonds)
Diamonds generally have a tendency to rise steadily with a growth rate higher than that of inflation. This makes investment in diamonds suitable for capital protection and, consequently, to be used as well as shelter.
It’s pointless to point to diamonds if you want a speculative type investment! Investing in diamonds is medium / long, and is therefore not suitable for those who want easy liquidation.
As with any commodity investment, being listed in dollars, we Europeans are subject to exchange risk. We could have made an investment that did well over time, but at the same time the dollar depreciated, or the euro appreciated, thus canceling the net margin.
Constant attention to their investments is the general council.
Even the weight of diamonds is paramount. A half carat diamond is worth around 3,500 euros while a 2-carat can cost about 40,000 euros. Obviously, it’s easy to understand how much easier it is to resell diamonds from 3,500 euros rather than 40,000!
However, at first glance it is understood that a 2-carat diamond is worth much more than 4 diamonds half carat. This is due to the fact that as the weight increases, the statistical probability of finding diamonds of that rank decreases considerably.
This makes diamond quotations not go to weight, but have different trends from weight to weight. Half-carat diamonds have preformed less than inflation in the last 10 years, while 2-carat gold has made more gold. So on the one hand, small diamonds are easier to resell, but on the other side perform little. Big ones, however, have made very high, but they are more difficult to sell quickly.
Purchase or Investment?
An investment can be considered such when it has a divestment value, otherwise it is a simple purchase. Here in Taranis .Capital, if customer wants it, we offer a real contract where we are committed to resell, or to re-buy, the purchased diamonds in a clear and transparent way. The contractual terms will vary from client to customer, based on a number of factors, which the same can choose freely, such as the minimum investment duration, the minimum required yield, or the sales commission term.