Friday, October 2, 2009


Diamonds have been treasured as gemstones since the ancient times. Popularity of diamonds has risen since the 19th century because of successful advertising in spite of a greatly increased supply. Diamonds are not normally used as a mainline store of value during times of crisis, due to their lack of fungibility and low liquidity. However, they may still be useful during times of hyperinflation.

Approximately 20% of mined diamonds are used in jewelry and 80% for industrial uses (such as lasers, drill parts and surgical equipment).

Today there are a few funds that are investing in diamonds. These funds purchase unique diamonds (very large in size or color); each stone is checked by a few professionals and negotiated until the fund decides to purchase it. Then a marketing team goes into action and through an extensive work the fund yield is gained. Between 2007 and 2008 the price of a diamond from the top range of color, clarity, cut and carat went up by over 50%.

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