Branding Can Provide Assurances When Investing in Diamonds

For the second year in a row, National Jeweler’s exclusive year-end survey showed that sales continue to rebound for retail jewellers, with 72 percent of respondents reporting gains in same-store sales in 2011. With all these positive development in the gemstone marketplace, most would agree that brand-intensive marketing is both necessary and desirable, however there is much disagreement as to whether it is only jewelry that should be branded; or whether a branded diamond is a viable option.

Over the last few years, there have been a number of significant efforts to brand diamonds, with the unique “Leo” and “Hearts on Fire;” being the most significant examples.  Nowadays, Industry experts believe that the De Beers’ “Forevermark” diamond, will become the new standard; for those investing in diamonds. Though being available for several years now on the world gems market, the De Beers’ “Forevermark” diamond is only being introduced in the United States; sometime at the end of this year. Furthermore, these precious gemstones will only be available, at a few hand-picked retailers.

All “Forevermark” diamonds are graded at the Forever Diamond Institute in Antwerp, Belgium, and according to De Beers, a “Forevermark” inscription indicates that the diamond has met the company’s standards; of assurance, quality and integrity. Each “Forevermark” diamond will have individual inscription on its table, with the “Forevermark” brand and identification number; using a patented technology. It has also been said that this inscription is invisible to the naked eye, as the actual inscription is only one-20th of a micron deep, and can only be seen using a special viewer; which is only available at authorized “Forevermark” jewellers.

Another Reason Investors are Investing in Gemstones

Looking for another reason to invest in gemstones? The increased market volatility of world economies and financial markets, will boost gemstones as a guardian and safe-haven; for your investment principle.

If we reflect upon the global turmoil that has followed investors since September 2008, volatility has become commonplace; in many international financial markets. This turmoil is pushing more investors toward the safety of gemstone investing, and driving up the prices of precious gems. The only associated risk with investing in gemstones, is related to the long-term outlook, for the global economy.

Regardless of political uncertainty, even if a currency investment remained flat, or even strengthen a bit; gemstones would continue to rise in value. Furthermore, the former Chairman of Princeton Economics International, recently speculated that investing in sapphire could rise sharply; beginning in October-November 2012. This will not occur as a reaction to rising inflation, but instead due to a general loss of confidence, in the United States government.

Despite Political Turmoil Gemstones Will Increase in Value

The situation remains extremely precarious and poses an unseen threat to the global financial market. Yet, you can still make money if you consider investing in alternative assets such as gemstones. Because gems often appreciate more, and are easier to liquidate, this is a smart investment strategy to consider;  in an increasingly uncertain economic environment.

As with any investment, investors must educate themselves and exercise a good deal of caution, and good old fashion common sense. As a rule, precious gemstones increase in value, at the rate of inflation. Of course, there are always exceptions. One good example is blue topaz, which used to be rare, and demanded a fine price. However, when the method of transforming common white topaz into blue topaz became available, the gemstone suffered a considerable drop in value. On the other hand, another notable exception is tanzanite. After the primary source closed, it skyrocketed in value. These examples represent exceptions to the rule. And therefore, unable to predict the future value of a gemstone, an investor's best strategy for investing in gemstones; is to buy them at the lowest price possible.

As a result of living in a globalized world, we sometimes end up paying for mistakes in judgement, that we did not personally commit; and had no immediate control over.The point I am trying to make, is that there is no reliable information available to assess the risk-return trade-offs, that traditional financial assets, such as stocks and heavily traded commodities possess; when their future is determined by political turmoil. When investors stop to consider this fact, some say that investing in diamonds is a wise investment, and deserves careful consideration.