Diamonds as an investment?

[dentures_79]

I also had a Hearts On Fire diamond, which I bought thinking was a great investment. It was a vs2-F-.794, it was priced at 8,120 and I purchased it for 7,320 (4 years ago). After becoming educated on this site I realized I could get a better/bigger stone for way less money than what I paid. I went to several different stores to ask about getting an upgrade. Every store offered the same deal, which was 3,500 toward the purchase of another stone. Most non HOF retailers will only offer you what a comparable non brand ideal cut stone would cost. Although, HOF is a nice stone...I paid way more for the name brand. I found way better non brand stones, that out performed the HOF stone. So in my case it was not a good investment for me at all.

 

[Black Jade]

Several different possibilities are being talked about here.

When you say ''investment'' it sounds as if you are thinking about normal times, under a normal government, when you put your money into a bank, or a bond or a commodity and try to get a good return on it. If this is what you want, diamonds are not a good idea at all.

The survivalist scenario is being discussed. In the case of being left behind in the Rapture, or a nuclear apocalypse, or an invasion from outer space, diamonds are also not exactly what you need. You would need things like canned food and clean drinking water and guns with ammo to protect yourself from roving gangs of thugs.

In the case of hyperinflation, a la Germany in the 20''s, which did seem like a further off possibility even last year than it does now (no politics on P''scope, I know, but the national debt is more than a bit scary) hard assets would be the best thing to have. Any savings in $$$ would melt away and you would want gold bars in the basement as your long term savings, and you would silver coins, clearly marked as to amount of silver they contain, in English, to buy the necessities of life with. Your own farm, or at least some chickens in the back yard would also be a good idea in this case, as your biggest need would be food. You probably wouldn''t want to buying much else (maybe gas to get around with?) and so far as paying rent and things like that, you would WANT to pay bills in dollars that were worth much less in the evening than in the morning. You just wouldn''t want people to pay YOU with them.

Experts can correct, but I believe that hyperinflation never lasts long. In Germany it was maybe six months? But it can be a LONG six months and those who are prepared so much better than those who are.

Diamonds would also not be of much use in this case. Too much value in one small object. When you just want a loaf of bread, you don''t want to have only a $1,000 bill that no one has change for.

Diamonds, and also gold jewelry are very useful though in the scenario that one person described above, where you have to flee the country in a hurry because you are Jewish and the Nazis have invaded (or, if this happens next year, the Islamists, in which case a lot of us who are not Jews will also be in trouble), or you are a businessman in Russia in 1917 or China in 1949 and the Communists have started shooting everyone with uncalloused hands--you get the point. All joking aside, people you talk to who have become refugees for reasons like this, usually never saw it coming until it DID come. And the people that you CAN talk to are the ones who did get out, usually because they had something to give to the people running the boats over to Hong Kong (this happened to parents of a friend of mine in 1949) or, as stated above, managed to get diamonds out in their coat linings that they could trade for pennies--but the pennies enabled them to survived. As opposed to the people who had nothing and so ended up in concentration camps or gulags (although having a little stash also DIDN''T save lots of people, you realize when you read about the guards at Auschwitz checking the corpses for jewelry hidden in body parts, before cremation).

It''s always good to be prepared, I guess, so far as you can prepare for things that look likely to happen. Perhaps a real catastrophe is about to come upon us soon. But all of the above scenarios are not going to happen at once, so the trick would be to figure which once is most likely, something that seems even harder to me than picking individual stocks. And of course you also need to be prepared in case NOTHING happens. In which case, there are things that you can do with your money that are more useful than D IF 1 carat diamonds under the bed or in the vault. (Ask the people who ''invested'' in diamonds in the early 1980''s about this one.)

 

[oldminer]

If things go badly in the USA you may be glad you have some alternative investments of non-traditional kinds. If we have hyper-inflation you'll be glad if you put gold and silver away for a rainy day. If we have war or disease or a collapse of governmental power you may well be served by ammunition, guns, and a stable food supply of necessities that could last up to 3 months or more. With the way the world is today, we might well experience both inflation and governmental disruption issues at the same time.

I want to stay optimistic and hope that these things will somehow be avoided, but it looks like we may just not be so lucky. What a world it would be with money nearly worthless, little food to buy, and mobs running in the streets. It would be good to have some degree of comfort stored away in universally exchangable funds or merchandise. Diamonds might be considered a valid part of such a doomsday portfolio, but you might find few people williing to exchange necessities for a luxury item. I think you'd find more people willing to trade what you need for what they need on a more immediate basis.

Diamonds of substantial size, fine fancy colors and high quality colorless stones have proved to be way better at holding part of their purchase price than many other luxury items such as fur coats and high end cars. Diamonds last a very long time and they are highly portable. This is an important consideration. A few diamonds set aside for bad days which may never come would not be a wrong thing to consider. It should not be a large percentage of your overall wealth or storage plans. Augment this with a stock of small silver coins, small gold bullion coins, some larger bullion bars and a good food and first aid storage system in a secure location and you will enjoy a high degree of comfort that if the worst occurs you may survive the first few weeks and months until things begin to come back to a new state of normal.

 

[Black Jade]

I am really not making fun of anyone or their fears (I have a lot myself) but I''m just thinking about all the things we have been scared about in my lifetime (a little more than 50 years). First, we hid under the desks in school because the Russians were imminently going to drop a nuclear bomb. Then, the inner cities exploded (I was living in one) and there were terrifying riots and there was definitely going to be a race war. Then, we had runaway inflation in the 70''s and also lines you wouldn''t believe at the gas pumps. And in the 80''s, I had just graduated from college but there was 12% unemployment and I couldn''t find a job. And the US was completely done as a world power. Our president couldn''t get our hostages out of Iran and everyone knew we were done.
And that was just the news headlines. A certain religious group, I won''t say which one because I''m not wishing to offend anyone, said that the world was definitely going to end in 1975. And then EVERYBODY said the world was going to end in 2000, owing to a problem with computers. I know people who still have canned food in the basement from that time. In the 1970''s scientists were predicting with great assurance the climate was changing and that we all would freeze to death very soon. I could go on and on and on.
However, nobody foresaw: HIV AIDS, the WTC bombing, the birth dearth affecting all the industrialized countries now except us, the fall of the former Soviet Union--I could also go on and on.
To keep my own sanity, I have just decided that Sufficient unto the day is the evil thereof.
Because I got exhausted worrying about catastrophes that never came, while ones that we never expected came out of seemingly nowhere (but we survived--by ''we'' I mean the human race, not each one of us personally, because as individuals, one way or another we''re going to go.)
Don''t mean to offend anyone.

 

[HopeDream]

It always puzzles me how diamonds are considered rare and valuable - almost every adult woman already owns 1-50 diamonds (if you include pave diamonds)and more if you count family heirlooms (which accumulate in families like mercury acumulates in fish). If everything goes south, the last thing people will want is diamonds.

I assume we''re not talking a few immigrant refugees pedaling their family wealth in an otherwise stable society, but everyone all trying to sell their expendables for food - the market will be flooded.

If we''re truly betting on a post-apocolyptic scenario wouldn''t it be better to invest in things that will be useful? - medicine, generators, treadle sewing machines, manual printing presses, solar pannels, wind mills, spinning wheels, vegetable gardens, horse-drawn carriages, UV water sanitation etc. (I don''t think socitey will regress to pre-industrial revolution)

Better yet, if you have a useful skill, and so can work for food and goods, you will probably be much better off than if you have some shiny pebbles to trade. - how are you at Fishing? Wood working by hand? weaving? Blacksmithing? Electrical wiring? Water purification? Midwifery? Have you formed trade and skill alliances with close friends and family members?

If a shiny bauble gives you "peice of mind" and you can enjoy it because it''s pretty then buy it because it makes you happy, but don''t assume that it will some how preserve part of your wealth in case of a crisis.

 

[dentures_79]

By investment I meant...when I purchased my Hearts On Fire diamond I hoped it would hold its value or I would be able to sell/upgrade for a comparable price to what I paid. In my case it was less than half.

 

[Todd Gray]

Date: 3/19/2010 4:16:46 PM
Author: HopeDream
It always puzzles me how diamonds are considered rare and valuable - almost every adult woman already owns 1-50 diamonds (if you include pave diamonds)and more if you count family heirlooms (which accumulate in families like mercury acumulates in fish). If everything goes south, the last thing people will want is diamonds.

I assume we''re not talking a few immigrant refugees pedaling their family wealth in an otherwise stable society, but everyone all trying to sell their expendables for food - the market will be flooded.

If we''re truly betting on a post-apocolyptic scenario wouldn''t it be better to invest in things that will be useful? - medicine, generators, treadle sewing machines, manual printing presses, solar pannels, wind mills, spinning wheels, vegetable gardens, horse-drawn carriages, UV water sanitation etc. (I don''t think socitey will regress to pre-industrial revolution)

Better yet, if you have a useful skill, and so can work for food and goods, you will probably be much better off than if you have some shiny pebbles to trade. - how are you at Fishing? Wood working by hand? weaving? Blacksmithing? Electrical wiring? Water purification? Midwifery? Have you formed trade and skill alliances with close friends and family members?

If a shiny bauble gives you ''peice of mind'' and you can enjoy it because it''s pretty then buy it because it makes you happy, but don''t assume that it will some how preserve part of your wealth in case of a crisis.

BINGO

 

[reggie]

I think a good question to ask is who would you be selling these diamonds too in a crisis situation?

Would I have to have to sell them to Wink or David Atlas who can distinguish all the nuances that determine what makes a diamond valuable? Why would they want them anyways?

Or would I pawn them off to someone who is trying to take advantage of the less fortunate? Someone who is trying to make a quick buck once the crisis is over?

If it’s the second option why not invest in synthetic diamonds or something of the sort? I think it’s safe to say the backyard opportunist won’t have the sophisticated equipment and/or knowledge to determine if the diamonds are “real” or not. You just better make sure they can never find you again once they figure out you have swindled them.

 

[Todd Gray]

Let's face it, our money hasn't been worth the paper it is printed on since the Federal Reserve Bank replaced the Gold Backed Federal Reserve in December of 1913, I did a little digging and found the last piece of authentic currency from 1913, a $50 Gold Certificate which entitled the bearer to "payment on demand" to the tune of 2.41896 troy oz of Gold (at $US20.67 per troy oz.) which could be redeemed at any bank or from the U.S. Treasury itself at any time. We've been fooling ourselves (not by choice) ever since.

 

[Lula]

Where I'm from when someone starts talking about stockpiling weapons, gold and silver coins, and food, two words come to mind: "Posse Comitatus."

I'm in the optimists' corner with Wink, Todd, and Black Jade on this one.

 

[Rockdiamond]

Darn, you guys are getting all apocalyptic.

If someone wanted to liquidate a rare diamonds, they''d likely go to a dealer who''d pay them a fraction of it''s retail value.

If someone did buy $60k one carat D/IF diamonds in 1980, they''d still have value today.
Sure it would be a huge loss, but not a total loss- which is possible in any investment.

 

[Dancing Fire]

Diamonds, and also gold jewelry are very useful though in the scenario that one person described above, where you have to flee the country in a hurry because you are Jewish and the Nazis have invaded (or, if this happens next year, the Islamists, in which case a lot of us who are not Jews will also be in trouble), or you are a businessman in Russia in 1917 or China in 1949 and the Communists have started shooting everyone with uncalloused hands--you get the point. All joking aside, people you talk to who have become refugees for reasons like this, usually never saw it coming until it DID come. And the people that you CAN talk to are the ones who did get out, usually because they had something to give to the people running the boats over to Hong Kong (this happened to parents of a friend of mine in 1949) or, as stated above, managed to get diamonds out in their coat linings that they could trade for pennies--but the pennies enabled them to survived. As opposed to the people who had nothing and so ended up in concentration camps or gulags (although having a little stash also DIDN''T save lots of people, you realize when you read about the guards at Auschwitz checking the corpses for jewelry hidden in body parts, before cremation).

that''s the reason why you see Chinese people wearing lots of 24kt gold jewelry,just in case the unthinkable happens.