Should I Invest In Diamonds ?
As the U.S. Stock market hits new highs, concerns of the marketplace peak have several investors seeking to alternative opportunities like gold, silver, or rare commodity like artwork or collectable automobiles.
As Tony Richards, that has served as CEO of Lamborghini and on the board of Maserati describes, People as tangible investments, rather than tedious paper in a bank somewhere. Likely the most attractive physical objects you can own is diamonds, and in Apr of 2013, Sotheby’s made statements when it sold a 74.79 carat white diamond for $14.2 trillion, far above its pre sale projected cost of $9-$12 million.
Just 30 days later, Christie sold a 101.73 carat diamond for $26.7 million. These auctions represent a tendency of rising diamond costs that have Wall Street taking notice. Supply will likely improve 2% to 3% yearly over the next decade, versus need of about 7% per annum, according to Martin Rapaport, chairman of the Rapaport Group, a global network of companies that tracks the costs of diamonds world wide. That year, a 3% contraction in international supply led to a 31% spike in the cost of rough diamonds, and research company Wealth X evaluates that costs will surge another 20% by 2017.
Does that suggest investors should expect to cash in on the diamond boom?
The answer is definitely complicated by the nature of the diamond business. The vast majority of diamonds produced every year aren’t of high enough quality for jewellery and are instead used for commercial applications. Including diamond windows, low friction bearings, and as hardening and abrasive agents utilized in drill bits in the energy business. Globally, annual jewellery is a $72 billion market which has tripled in the last 25 years. The above map shows the 15 biggest diamond producing nations in the world. As you can tell, the most of diamonds are made in Africa, where the extraction of rough diamonds contributes $8.5 million annually to the continent’s economy. It is also because diamonds, like art work or collectable vehicles, are each unique. According to Brent Fykes, senior Investment Partner for GenSpring, an asset management company for individuals with $20+ million to commit, Each rock is definitely very unique An ounce of gold is definitely an ounce of gold, but it not like that for diamonds. Mr.