Characteristics of Diamonds
Last updated
Last updated
As depicted in Figure 1, diamonds have demonstrated a consistent increase in value over the past 55 years, boasting an average annual price growth of 14%. This insight is drawn from index data that tracks historical diamond prices from 1960 to 2016. In simpler terms, if you had invested in diamonds back in 1960, your investment would have appreciated by over 1,000% by 2016. This yearly increase in diamond prices, spanning from 1960 to 2016, is equivalent to an annual compound interest rate of 4.3%.
Note: The diamond industry is known for its confidentiality, resulting in a limited availability of information. Consequently, numerous sources describe the potential investment growth of diamonds. Some of these sources even suggest that the investment value of diamonds could be higher than the figure presented here. This assertion is rooted in the understanding that a higher carat number can lead to exponential growth in the value of a diamond.
Inherent Scarcity: Natural diamonds are relatively rare and take millions of years to form deep within the Earth's mantle. This inherent scarcity makes diamonds valuable and less susceptible to inflation, as their supply cannot be easily increased.
Portability: Diamonds are compact and lightweight, making them easy to transport and store. This portability is advantageous for those looking to store wealth in a small and valuable form.
Durability: Diamonds are one of the hardest substances on Earth, making them highly resistant to wear, damage, and corrosion. This durability ensures that they retain their value over time.
Perceived Value: Diamonds have long been associated with luxury, wealth, and romance. Their cultural and societal value adds to their appeal as a store of value, as people are willing to pay a premium for them.
Tangible Asset: Unlike digital or paper assets, diamonds are tangible physical objects. This tangibility can provide security and trust, as individuals can physically possess and see the asset.
Liquidity: While not as liquid as some other assets like currency or stocks, diamonds can still be sold relatively easily through reputable dealers, auctions, or private sales. The diamond market is well-established, and there is a demand for high-quality diamonds.
Historical Use: Diamonds have a history of being used as a store of value. They have been used as a form of currency and wealth preservation in various cultures and regions over centuries.
Hedge Against Economic Uncertainty: Like other alternative investments, such as gold, some people turn to diamonds during times of economic uncertainty or currency devaluation as a way to protect their wealth.
This is why we've chosen to anchor our project with diamonds.
