The Eternal Wisdom of Investing in Loose Diamonds

When it comes to an investment for the future, as they say on almost every television commercial, there are many risks to evaluate. One of the questions that people ask is how long has the company or commodity been around? The thought behind this question is simple and logical: the longer a company has been in business, the more stable it is going to be and the more secure a person can feel investing. (Of course in today's hyperactive world of investing, with penny stocks and day traders and the allure of tech start-up IPO's, I feel like the longevity of a company isn't as important as it used to be.) Worldwide, there are very few companies that have been in existence for more than three hundred years. Here in the states there are probably only a handful that have hit two hundred years in business, and any company that makes it fifty years is considered old and stable. Think of that when you look at the fact that loose diamonds have been a stable and steady source of investment for almost two thousand years.

You might want to switch from stocks and bonds to commodities.

From the very start of trading between Europe and the Far East via the Silk Road across India, diamonds were the preferred form of currency. No matter what country you were in, they had a perceived and accepted value. Not all of that value was based on the appearance of them. In China, diamonds were prized for their toughness and durability and the Chinese would put them on the ends of their ax blades. The wealth of Europe in the Middle Ages was created by the supply and demand of diamonds both because of how prized they were for their beauty as well as the fact that their value was exact. Gold could be melted and mixed with other metals, coins could be counterfeited, but a diamond was a diamond.

What's best about investing in loose diamonds is that there is no way to manipulate the value of them like you can with stocks. You don't have to worry about what direction the C.E.O. of diamonds is going to take the company, and you certainly don't have to worry about the SEC coming in with lawyers and search warrants asking to see diamonds last five years of paperwork. If you're going to invest (and you should) put your money where people have been safely putting it for the last two thousand years.

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Jack Terry has published 1 article. Article submitted on October 15, 2013. Word count: 416

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