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Diamonds as a Piece of Your Retirement

By: , dated January 25th, 2013

Making the right investment decisions for retirement can be rather difficult at times. While your financial advisor may tell you to do one thing or another, you may feel like a mutual fund or stock in a particular company is a better idea. One thing you are unlikely to have considered as a part of your retirement portfolio, though, is diamonds.

For the last two thousand years, diamonds have been considered to be precious stones. They were religious symbols for many, and as the industry improved techniques to polish and cut them after mining, they became quite popular in the upper echelons of society. According to many financial advisors, the average ROI (return on investment) on diamonds has been about fifteen percent per year for the past sixty years. This seems to be holding steady as diamonds are increasingly becoming a more important part of our culture. While once reserved for women’s jewelry, many of the most watched men in America are often decorated in diamonds. They have become an integral part of the hip-hop culture, and women are now willing to wear more and larger diamonds on a regular basis. Even if the popularity of diamonds were to lose ground within our culture, the value of diamonds to our industries would not be diminished. More than eighty percent of the diamonds mined worldwide are used for industrial purposes like surgical tools and lasers. There seems to be no large accumulation of mined diamonds currently in the world, as the De Beers group, which hold fifty percent of the market in diamonds, has said that they have been using only newly mined diamonds for the past two years.

There are two different ways to invest in diamonds as a part of your retirement portfolio. The first way to make this kind of investment is to purchase the diamonds themselves. This is a bit less stable (due to the fluctuations in prices); however, if you do decide to invest in diamonds in this manner for your portfolio, there are a few things you should know. First, be sure to buy at the current (and correct) wholesale price. Do a bit of research before you make your investment to be sure you are getting the right price. The internet is a great place to find solid research on the current wholesale prices. Second, only buy diamonds that are internationally certified, otherwise you may be getting a low quality stone. Finally, some companies offer a buyback guarantee which you may or may not be interested in. It offers some investors piece of mind that they will always be able to resell the diamonds. The other way to invest in diamonds is by buying shares in one of the diamond companies. This works as any other stock does, and your success, or failure, depends on how the company does financially. Most diamond companies, though, are relatively stable institutions.

If you’re looking for security in your retirement portfolio, diamonds are a good bet.

This article was brought to you by the InvestorGuide Staff Writers and Editors.

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