Investing In Diamonds: Challenge And Opportunity

Investing in diamonds may sound very ‘fancy’ but it is much more challenging than it sounds. Moreover, investors can choose between investing in the commodity itself or buying diamond miners. When it comes to diamond miners we wrote 8 top diamond stocks for 2019 and beyond 2020 which is a great starting point for the diamond stock investing option. In this article, we analyze the challenge and opportunity that comes with the two forms of diamond investing.

Looking into the options when it comes to diamonds investing, the dynamics of this market, the price charts and means to do chart analysis (or lack thereof), all combined illustrate how tough this area is.

Diamond Investing Tools (or lack thereof)

Just looking at the diamond price chart for rounded diamonds probably makes our point.

(Click on image to enlarge)

Each and every one of our followers will admit that this is not the type of chart to identify patterns, nor does it allow for a basic top-down chart analysis approach (monthly / weekly / daily timeframes).

Moreover, above is the price chart of rounded diamonds. There is a multitude of other diamonds with each their own price (history).

Prices of Diamonds: The Variety

FT.com made this point as well in their article from 2013: “Certain types of diamonds, including colored varieties, have held their value over the past few years better than other more volatile equity investments,” says Vashi Dominguez, chief executive of diamond trading company Diamond Manufacturers.

As per this diamonds investing article “the price of blue diamonds has climbed 228 percent over the past decade and yellows by nearly 49 percent. White diamond prices are up just 3.5 percent over that period. But there are dangers for investors. ‘Diamonds are not only a store of value but they have outperformed any stock market in recent years.”

If anything, investing in the stock market may also be challenging, but at least there is plenty of information out there. Moreover, there are many charting tools as well as data points available to perform the analysis.

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