Date
26 July 2017
Diamonds are perhaps a good way to show your love, but are certainly not the right vehicle to invest your money. Photo: Internet
Diamonds are perhaps a good way to show your love, but are certainly not the right vehicle to invest your money. Photo: Internet

Is diamond a good investment?

Dubbed by some marketers as the slogan of the century, “A diamond is forever” from De Beers has certainly helped the company a lot in boosting demand for the sparkling precious stone.

While these long-lasting diamonds may suggest eternal romance, their monetary value is anything but forever.

Quoting a Rapaport Diamond Index, an industry benchmark, the Wall Street Journal points out that “prices of top quality stones have collapsed by as much as 80 percent in real, inflation-adjusted terms over the last 30 years”.

Every stone is different, but roughly speaking, a typical top-grade one-carat stone cost about US$6,100 in 1978 compared with US$11,000 today.

After factoring in inflation, the market price of the same stone has lost about half of its value in real purchasing power, the report says.

On the contrary, diamond vendors are doing much better.

For those who have invested in Tiffany & Co. or Anglo American (one of the major shareholders of De Beers), they would have enjoyed hefty gains over the past decades.

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RA

EJ Insight writer

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