Are Diamonds Risk-free Investments? | BNT Diamonds

Are diamonds risk-free investments?

Although diamonds carry an intrinsic and sustained value accumulation capacity due to increasing demand and decreasing supply (for more information, click here), they can — like any other investment option — experience price decreases.

When it comes down to it, investments are rarely entirely risk-free. The value of any commodity can change after purchasing. Just as value can increase, it can decrease too, creating a balance. So diamond investments, with their ability to fluctuate in price, is not a complete risk-free investment. Still, they are resistant to drastic price fluctuations, which decreases their risk as an investment.

So when might the price of a diamond decrease? Severe economic crises can impact the value of diamonds, decreasing potential return on investment (click here for more information about the crisis resistance of diamonds).

Similarly, periods of temporary oversupply within specific diamond segments can trigger price decreases or reduced value. When this happens you may not be able to sell investment diamonds at the same price you bought them for. Or, you may find it difficult to find a buyer for your diamonds.

One of the biggest drops in diamond prices happened in the eighties, when there was unprecedented worldwide speculation towards banks and investment. Today, there are processes in place to avoid a repeat of that situation, which further protects the value of diamonds.

Ultimately, diamonds are relatively crisis resistant especially when compared to the volatility of other types of investments or commodities. Diamonds are one of the least affected investments during economic crises, and their value typically rises continuously.

Though they are risk resistant, they are not risk free. It’s important to know the difference so that you can make strong, informed decisions before investing in diamonds. BNT Diamonds can offer expertise and guidance in diamond investment. Get in touch today or request a quote on your diamond investment.