Is Diamond Jewellery a Good Investment?
Over the last few years, the use of diamond jewellery as an investment tool has been rising in popularity. While our parents and grandparents might prefer to invest in pure gold rather than diamonds, the recent generations have shown an increasing interest in using diamonds as a part of their investment portfolio. In fact, as a physical commodity, it is often used as a financial hedging tool to provide a safety net in case the general market went down. This ultimately comes down to supply and demand, as stated in an industry report by Bain & Company “While supply is declining, global consumer demand for diamond jewellery is growing and shifting”.
However, what makes diamond jewellery a good investment tool? Here’s some of the reasons of why you should invest in diamond jewellery:
1 - Crisis Resistance
The value of physical assets, such as gold, silver, real estate, and diamonds tend to increase overtime regardless of the market conditions. Diamonds, in particular, are fully crisis resistant as proven by their price during the 2008 financial crisis compared to other assets. While the price of all other traditional components of an investment portfolio, such as stocks, bonds, and future contracts, crashed during the crisis, the price of polished diamonds were hardly affected. Moreover they are timeless and do not go “out of style”, unlike property assets, thus making it a better option for a long-term investment.
2 - Selective Liquidity
Despite the absence of a public trading platform like those of financial assets, diamonds remain a highly liquid asset. This liquidity strongly varies depending on the market segments and certifications and categories of the diamonds itself. For instance, commercial-grade diamonds are highly liquid and therefore easier to sell when compared to an exquisitely rare diamond, which can only be sold to a small collector’s market. Hence, investments on commercial-grade diamonds, such as those commonly found on jewellery can easily be sold for profit.
3 - Durability of the Stone
The durability of diamonds is another advantage they have been naturally bestowed upon. As the hardest thing on earth, you can rest assured that your investment will not depreciate in quality, unlike real estate investment. It does not get easily damaged by everyday wear-and-tear. As long as you take good care of it, your diamond jewellery could last for generations, making it an ideal long-term investment or a heirloom piece.
4 - Diamonds are Portable
The most advantageous characteristic that diamonds have over gold bars is its size. This precious gemstone packs a lot of value in such a small piece that you can easily store. A diamond trinket, regardless of its size, is usually worth double or triple compared to gold jewellery of the equal size.
In comparison, gold bullions take up a lot of space and are often heavy to carry around. As a result, it is harder to keep it at your own home - for instance, you may choose to store them at the safe deposit box in your bank vault. This means that if you need to sell it urgently, there are often barriers that will need to be completed in order to access your possessions. As such, it is far less practical than keeping a small box of diamonds in your home.
5 - Aesthetics and Emotional Value
Unlike other financial instruments, you can actually wear your investment if you choose to put your money in diamond jewellery. Moreover, diamond jewellery is often associated with a meaningful event in one’s life, such as engagement or weddings. Your diamond ring is connected to your relationship and becomes imbued with memories as the relationship flows. It is one of the only few luxury items that become more valuable the more they are worn. This is why many chose to turn their diamond jewellery into a family heirloom.
In summary, diamonds have many benefits as an investment commodity that far outweighs their downsides. As with many other investment portfolios, it is always a good idea to diversify your investments to protect yourself from market fluctuations. If you are looking to purchase diamond jewellery in Singapore for your investment portfolio, visit Infiniti Jewels for the best diamond jewellery in Singapore. Whether you are after bridal diamond jewellery or perhaps more of a bespoke jewellery piece, contact us today so we can bring you the diamond of your dreams.