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Is investing in Diamonds better than Gold?

I was curious about this and was wondering why no one has mentioned Diamonds as an investment.




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Yeah, I've always heard there is basically an international monopoly on diamonds. They know which countries produce the most, then outlaw the production in that region which chokes off the majority of supply. Then it gets produced and purchased on the black market, funneled thru certain countries before making it to your local jewelry store. Basically it raises the price of diamonds astronomically.

You can see the value in having many thousands of dollars in such a portable, compact, durable commodity (far smaller and more valuable than platinum in some cases) for money laundering and illicit trade.

So what you have is an artificial scarcity, whereas gold production and procurement is legal in most countries. But honest trade means capital investment and stable governments.

Don't know if it's true, but it seems to make sense when you see some of what is going on in Africa.

If you find a good deal and can make a profit, buy it then turn it back into gold or cash. That's what I'd do, at least.

SteveMT's picture

There are about 50 different grades of diamonds.

http://awesomegems.com/diamondfacts.html
Grading diamonds is an involved and subjective process done only by humans and wide open to corruption. For people of average means, diamond investing is a waste of money.

Hard to sell

Gold is easy to sell, so whether it's gone up in down in price it's easy to turn it back into cash. You and the jeweler pay the same for gold. There's no penalty for the privilege of selling now. You can sell gold in any town. You don't need any business relationships to do so.

Diamonds are a lot more complex. It's not a simple matter of weight. Factors like cut, clarity, and color also matter. Each of these properties is complex. Take cut: what shape is it? Round brilliant? Princess? Some other fancy shape? Clarity: Where exactly are the inclusions?

You and the jeweler pay different prices for the same thing. Want to sell now? Prepare to take a huge haircut. It's true, diamonds are a huge industry. There's a lot of demand for them, but to make money you have to be in the business. You have to have customers with less knowledge of or access to the diamond market than you.

It's absolutely not something to dabble in as a retail investor. I've had some company cold call me trying to get me to invest in diamonds. If these guys ever call you ask them, "Name 5 places in my city where I can sell $100k of diamonds in 2 hours without your help"

No. It's better to invest in

No.

It's better to invest in equipment and go out and tap into OUR natural resources. We need to defend our mineral rights before our bankrupt country sells them out, blocking access to OUR lands and ushering in slave centers and Agenda 21.

We need to bring competition to market. We need to develop our resources and put an end to the monopoly of the diamond trade that is under total control....including by corps like DeBeers.

We have many natural resources and precious and semi precious gems. With this investment and green mining practices on a local level, we can provide jobs for teenagers, jewelers, traders, and carvers. Beats blood diamonds.

Stand up for your mineral rights, or like anything else, they will go away. Invest in the equipment and maybe you will find a little gold while looking for something else.

Be Your Own Media!!!

depends on the diamond

And it depends on the nation as some produce diamonds, for jewlry and for industry, tools for cutting for example, and there are numberous synthetic diamonds, that even include a way to "keep your loved one near you always" in the form of a diamond.

Here's a look at the top of the world in the diamond investment industry

Yes, as stated below,

Yes, as stated below, diamonds are a manipulated market.

To climb the mountain, you must believe you can.

Diamonds aren't rare. They're

Diamonds aren't rare. They're actually pretty common, but the diamond industry treats them as rare. It's basically a scam. But value is subjective.

Meesa Free! I never have to

Meesa Free! I never have to by a Diamond Ring for a Girl!

Read this please: Ten Reasons Why You Should Never Accept a Diamond Ring from Anyone, Under Any Circumstances, Even If They Really Want to Give You One

http://www.africansocialnetwork.blogspot.com/2006/12/blood-d...

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No it is not

The diamond market concerning supply and demand is manipulated by the De Beers family. Diamonds are actually more plentiful than you think. If you wanted to invest in precious gems I would look at emeralds, rubies and sapphires.

Diamonds are not a great investment

But of course, if you buy them right, they can be.

They are simply carbons, which is everywhere!!!

Also, they can be manufactured, unlike gold!

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

Diamonds do not retain value.

If you try to take your diamonds to a pawn shop, they won't buy it.
grant

Séamusín's picture

what if a product is only worth half the diamond?

Would you just break that sucker in half?

Séamusín

If I hand you a random diamond would you know what it is worth??

Most people you would want to trade with would not.

One reason gold and silver are preferable is, minted coins and bars have a predetermined purity and weight and thus one can more easily determine their worth (still requires some trust that it hasn't been tampered with or extra effort to prove it hasn't been tampered with).

Mighty mountains in grandeur stand, but tiny raindrops turn them to sand! Noah, I think I just felt a raindrop!!

Interesting question.

I have heard that Diamonds are not really that rare, and are kept scarce by the tycoons to keep the price high.

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