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Buying Diamonds as a Hedge Against an Uncertain Economy
You're shopping for a
diamond pendant or perhaps considering purchasing a pair of anniversary rings so
that you and your spouse can mark an important milestone in your marriage.
Diamonds are not only beautiful, but they can also hold their value, something
today's savvy consumer is well aware of.
One question you may have, especially as you survey the topsy-turvy global
financial markets, is whether diamonds can be a good investment for the long
term. Though diamonds have performed well over the long haul, that answer isn't
as simple as you might hope. There are a number of factors which determine
whether a diamond or diamond jewelry will be worth substantially more money
several years down the road.
Though some of what I will share with you is theory, there are a few things to
consider before making a diamond purchase especially when doing so as an
investment. Please read on and we'll explore how you can protect your diamond
investment:
The Bigger, The Better
– Jewelry broker, Martin Rapaport, whose personal price list is used as a
standard for wholesale trade in polished diamonds, mentioned earlier this year
that the decline in the value of the dollar, in which diamonds are priced, has
increased investment in diamonds as a hedge against inflation. But, the recent
run up in value of the dollar is easing diamond prices, suggesting that current
market volatility may make such investing a risky proposition for some people.
Heirlooms and Collectibles
– Some investors stay away from the big diamonds market, unable to keep up with
the big
guys who
have a lot of cash on hand. Instead, these people frequent estate sales for
family heirlooms and collectibles in search of that special diamond wedding band
or pair of pearl drop earrings from another era. Dealers scour the market for
the best deals, make needed repairs, and turn around and sell their finds for a
profit.
Designer Jewelry
– The jury is out on the long term value of designer
jewelry, particularly on trendy pieces which tend to lose their appeal within a
few short years. Keeping that in mind, most of the top designers embody both
trendy and classical themes to develop lines of jewelry that will look great
ten, twenty, even fifty years or longer provided they are kept in very good
shape.
What You Love
– Of course, most buyers purchase their diamond jewelry with one thing in mind:
what they love. This is the most important consideration when making any jewelry
purchase, that you really like what you want to wear. Buying jewelry with an eye
on its long term value is fine, but that shouldn't ever supplant your desire for
a particular pair of diamond earrings, a silver ring, pearl drop earrings, or
some other personally valued accoutrement.
So, can
buying diamonds be a good hedge against inflation? Long term, diamonds have done
well. Selecting the right diamond is important, of course. If you possess the
intestinal fortitude to weather the vagaries of the marketplace to endure the
short term ups and downs, then the answer very well might be yes.
For most people, finding the right diamond jewelry at affordable prices can
provide for you just the right blend of value and desirability, something no one
can put a price on except for you.
For questions or advice, contact Robert at 858.692.3939 or Robert@IncendiaDiamonds.com.
