Beating the diamond rush
Quiet talk about the advantages of investing in diamond is now
reaching a crescendo, with the launch by financial institutions of
different diamond exchanges and traded funds. As with any new trend,
those on the inside track have the initial advantage and can get on
board before prices start to rise, 
ready to reap the profits at a later
date.
“The Waldman Diamond Company has been selling diamonds directly to investors at wholesale prices for the past 18 months”, explains CEO Alexander Waldman. “We are seeing increasing interest because diamond prices are rising and because gold has become a more precarious investment. As consumer demand for diamonds in India and China increases, analysts say that diamond prices will rise by an average of 6% annually through to 2020, due to constrained supply not being able to meet rising demand.”
Various attempts have been made to standardize the classification of diamonds in order to ease their commoditization, and the US Patent Office recently issued a patent for identifying investment grade diamonds and bundling them in ‘baskets’ for sale to investors. Some financial institutions are launching diamond ETFs to allow investors to benefit from the predicted increase in diamond prices, but without allowing them to own or wear the stones that they invest in.
At the top end of the market, premier white diamonds (weighing 20 carats or more) sold at auction have increased in value by 5.5% in real terms since 1999. In his report entitled “The Returns On Investment Grade Diamonds”, Luc Renneboog of Tilburg University in the Netherlands says: “since 1999…. both white and colored diamonds have significantly outperformed the US and European stock markets, US and European real estate, US government bonds, as well as European government and corporate bonds.”
While the diamonds analyzed by Renneboog were “celebrity” stones sold at auction, Alexander Waldman believes that the best options today for diamond investing are the smaller, more popular stones. “Because of increasing demand from consumer markets in the Far East, small polished diamonds have increased in value by over 60% over the past 5 years. We usually guide individual investors towards certified diamond sized between 1 and 3 carats, which today cost between $6,000 and $60,000.”
Diamond investing is becoming easier through the openness and transparency of online investment diamond exchanges. Purchasers can look at the inventory listed on the internet to select their stones and inspect their recognized authenticity certificates, in order to check the purchase and resale prices of different diamonds. They are recommended to talk to expert gemologists at the Waldman Diamond Company to verify which stones are selling well around the world and are likely to increase in value.
A recent study by Ernst & Young has shown that the prices of gems offered on the Waldman Diamond Company’s Investment Diamond Exchange are 6% below average international wholesale prices and 25-46% lower than online retail prices. The Waldman Investment Diamond Exchange charges a flat 3% brokerage fee and will help investors who want to liquidate their investment to sell their diamonds on the wholesale market at minimal cost.
ready to reap the profits at a later
date.“The Waldman Diamond Company has been selling diamonds directly to investors at wholesale prices for the past 18 months”, explains CEO Alexander Waldman. “We are seeing increasing interest because diamond prices are rising and because gold has become a more precarious investment. As consumer demand for diamonds in India and China increases, analysts say that diamond prices will rise by an average of 6% annually through to 2020, due to constrained supply not being able to meet rising demand.”
Various attempts have been made to standardize the classification of diamonds in order to ease their commoditization, and the US Patent Office recently issued a patent for identifying investment grade diamonds and bundling them in ‘baskets’ for sale to investors. Some financial institutions are launching diamond ETFs to allow investors to benefit from the predicted increase in diamond prices, but without allowing them to own or wear the stones that they invest in.
At the top end of the market, premier white diamonds (weighing 20 carats or more) sold at auction have increased in value by 5.5% in real terms since 1999. In his report entitled “The Returns On Investment Grade Diamonds”, Luc Renneboog of Tilburg University in the Netherlands says: “since 1999…. both white and colored diamonds have significantly outperformed the US and European stock markets, US and European real estate, US government bonds, as well as European government and corporate bonds.”
While the diamonds analyzed by Renneboog were “celebrity” stones sold at auction, Alexander Waldman believes that the best options today for diamond investing are the smaller, more popular stones. “Because of increasing demand from consumer markets in the Far East, small polished diamonds have increased in value by over 60% over the past 5 years. We usually guide individual investors towards certified diamond sized between 1 and 3 carats, which today cost between $6,000 and $60,000.”
Diamond investing is becoming easier through the openness and transparency of online investment diamond exchanges. Purchasers can look at the inventory listed on the internet to select their stones and inspect their recognized authenticity certificates, in order to check the purchase and resale prices of different diamonds. They are recommended to talk to expert gemologists at the Waldman Diamond Company to verify which stones are selling well around the world and are likely to increase in value.
A recent study by Ernst & Young has shown that the prices of gems offered on the Waldman Diamond Company’s Investment Diamond Exchange are 6% below average international wholesale prices and 25-46% lower than online retail prices. The Waldman Investment Diamond Exchange charges a flat 3% brokerage fee and will help investors who want to liquidate their investment to sell their diamonds on the wholesale market at minimal cost.
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