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Which Is The Better Investment: Gold Or Diamonds
One thing the most recent recession has taught us is that while stocks and bonds can be the door that leads to one’s financial security, it can also be the door that suddenly slams shut, locking all finances away for good. The instability of the market has lead investors to search elsewhere for wise and worthwhile opportunities. Precious metals and stones such as gold and colored diamonds are two of the hottest options available for potential investors. Both of these commodities have proven successful and safe as investments over the past forty years. Here is a look at why these items have done so well despite the poor economy and speculations regarding what the future may have in store for them in terms of their value.
Gold has been valuable and used as a form of currency for centuries. Its beauty as well as unique characteristics have been acknowledged and appreciated by men and women alike, whether acquired for the purpose of an investment or to be used as jewelry. However, when purchasing enough Gold to invest, you don’t actually take hold of the goods. Rather, you acquire ownership on paper. In the time of need, whether an emergency or natural disaster, most prefer to actually have their investment in their own possession. Furthermore, Gold has fluctuated up and down quite drastically over the past ten years, but overall moved in the right direction. It most defiantly is its own commodity, but it is directly connected to the world economy. The fact that these precious metals are stored by banks, it is impossible to know what is going to happen with your investment.
Unlike gold, colored diamonds have only begun to grab attention of the investment world recently, at the beginning of the 21st century. Nevertheless, colored diamonds do have a rich history, as they have been worn and purchased by royalty and the higher classes for some time. Though they have always been rare, colored diamonds are even rarer today as a result of their growing popularity and high demand. The sources for colored diamonds, particularly certain colors, are extremely limited. Between the low supply and high demand, the prices are forever soaring. This is precisely what makes this commodity and excellent investment, and it is only one of the many appealing reasons.
White Diamonds vs. Colored Diamonds
White diamonds differ from colored diamonds in a number of ways, and not just in color. The consumer, alone, is the decisive component in a white diamond’s value while a colored stone’s rarity and potential high bids at auction houses are what ultimately determine colored diamond prices. Extremely rare diamond such as red and blue diamonds most certainly demand high prices, but even “more common” colored diamonds such as brown and yellow diamonds account for less than 0.1% carats of white diamonds that are found. Prices at auction houses are constantly increasing, so much so that natural fancy colored diamonds from the year 2007 to the year 2012 broke a total of thirteen price records. The solid rate at which colored diamond prices are rising legitimately removes colored diamonds from the “risky investment” category that many are distancing themselves from in light of the collapsed economy.
Yet another advantage to investing in colored diamonds as opposed to gold for instance, is its weight and ability to be moved with great ease. If one chooses to invest in a physical item and not a company’s stocks, there is quite a range of options to choose from. However, if one would like that object to be easily protected and moved, the choices taper significantly. Unlike, say, a valuable painting, a colored diamond can be transported easily. The amount of gold equal to a valuable colored diamond cannot be moved quite so easily. Large amounts of gold are usually not even stored on an owner’s property, but rather, in a bank. A colored diamond can be stored or hidden in one’s home, safe, or even worn on their finger.
One of the most important aspects of an investment is how easy it is to liquidate. Gold is fairly easy to liquidate, thanks to modern technology. It can be sold and money transferred with a click of a mouse. Though selling a colored diamond is slightly more complex than that process, a rare and high quality colored diamond is worth the wait. Similar to a piece of art, or sought after piece of land, the sale may take time, but the high rewards are much appreciated. The best part about acquiring a colored diamond as an investment should be quite obvious. A colored diamond is, after all a colored diamond! It can be worn in a variety of ways and displayed before everyone. Of course colored diamonds should be insured, but that is the case with any valuable item. The difference is, there is nothing exciting to be done with piles of gold. Yet a stunning pink diamond pendant can adorn you every day while ensuring that not too far down the line it will be worth much more than its cost.
While there is not much to know about gold, it is either certified or not, there is quite a lot to learn about colored diamonds. This should not steer you away from the fantastic investment opportunity that a colored diamond offers you. This, along with the other aspects of a colored diamond, is just part of bringing a remarkable natural specimen into your belongings that is much more than a boring asset, but an intriguing stone that has many facets, in more ways than one. Colored diamonds are not only long term alternative investment options but they are currently the world’s strongest long term alternative investment options that also provide you with beauty, fascination, along with many other advantages.
More Stats and Info
The US stock market is on life-support, and has been for quite some time. It will depend on the actions of the Fed and other Central Banks throughout the world to save our financial system from crumbling. While Bernanke's recent statements and testimony before Congress was somewhat disappointing to those hoping fervently for a hint that QE3 was just around the corner, the hope is still alive. The world we live in is full of some amazing natural resources such as Argyle Diamonds that prove to be a safe haven for investors. Just because the US economy has seen better times doesn’t mean a promising future is hopeless. The Rapaport historical price graphs below show statistical data over a period of the last 10 years that prove the strength of Fancy Color Diamonds compared to other major assets in the market, such as Gold, Platinum, the DJIA, and Colorless Diamonds as well.
Many of Leibish & Co.’s respected private clients have questioned whether Gold or Fancy Color Diamonds are a good and safe alternative for long term investments. ‘Fancy Yellow diamonds above 2.00 carats with an IF clarity grade’ and ‘Argyle Pink diamonds above 0.50ct in any clarity grade’ are only some of the stones highly recommend to retain and increase in value over the next 10-15 years. However, there are many different opinions on the matter by some of the most well respected financial institutions we have had the pleasure of working with.
A gorgeous piece of prime land in New York City or Sydney, Australia is worth a substantial amount of money and translates to excellent investment property. Similarly, those looking to sell an important impressionist painting, like those often auctioned off at Sotheby's in Geneva, can often expect a rather high return on their investment. Only, in order to sell a painting or a Pink Diamond, one needs a professional network at their fingertips. These are the types of long-term investments that are worth adding to a portfolio even though it often takes more than a mouse-click to liquidate.