Wednesday, August 14, 2013

Rough Diamonds And The Need For Transparency In A Difficult Market

By Anthony Clark


The diamond has been regarded as one of the most beautiful of all the precious stones. The increase in the demand for such assets has been clouded by the fact that supply will begin to taper off in the future. The longer term plans put in place are slow in its progression leaving investors without the necessary transparency in the rough diamonds market.

The ongoing demand for the precious stones has led to a greater number of investors looking to capitalize on these trends. These stones serve as an indication of wealth and ever lasting love. It also serves as a desirable trade because of its long term investment value.

A larger number of investors are moving towards this particular asset as it tends to hold its value when the economies are experiencing a slump. For these reasons people are considering cash injections into the industry as a result of future limited supply and value increases. The limitation is the lack of transparency and the options available for investment.

The diamond market cannot serve as the same investment opportunity as commodities such as gold and silver. It does not possess a uniform value because it is based on individual aspects involving the cut, color, clarity, and carat. These valuations are subject to the experience and expertise of an appraiser and a lack of a single price index.

If these stones are traded in retail, the potential for significant profits is decreased. There are also a number of complications surrounding the overall value and insurance of a diamond. Many would advise against investment in these markets unless you have access to expert opinion in the industry.

The key issue of the rough diamonds is determining a way to achieve economies of scale. Many companies have released reports for investment in diamond funds that may prove most favorable for traders. Remaining in contact with knowledgeable persons in industry and understanding trade options can aid in making the best possible investment decision.




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