Diamonds Are They A Good Investment?
Diamonds: A Girl’s Best Friend
A common gift at engagements, weddings and other festive occasions, diamonds are certainly expensive and valuable - but not as an investment. Here’s why.
Falling Rough Diamond Prices
One reason why diamonds are a poor investment? The growing availability of rough-cut diamonds has pushed prices of rough diamonds down since 2011.
Falling Retail Prices
At the retail end, diamond prices have been falling, though the final price depends on grading: colour, clarity, cut & carat. Gold, on the other hand, has been trending upward.
Diamond jewellery comes with a huge mark-up: a sizable chunk goes towards the gold charges, another towards making charges and another as GST.
Only around 70% of the purchase value is of the diamond.
Poor Resale Value
Unlike gold and silver, diamonds don’t have the same resale value and there isn’t much transparency in the buy-back market.
Since one parameter of grading is the carat weight, a large one-carat solitaire will be more expensive than a 25-cluster ring - so if you buy smaller-sized stones, you stand to lose out.
Wear Them - But They’re Not An Investment
You can purchase diamonds for wear, but downward price trends and an illiquid secondary market don’t make them a good investment.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.