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3 reasons South Africans need to invest in diamonds – now!

3 reasons South Africans need to invest in diamonds – now!

South Africa’s current tumultuous political environment is creating an unstable economic landscape that has seen various ratings agency downgrades. In this uncertain climate investors are looking for stable investments that will secure their wealth, while still generating solid returns.

Diamonds have been a source of wealth and security for centuries, and continues to this day as a strong and stable addition to any investment portfolio, especially in times of political and economic uncertainty.

3 reasons diamonds are a great investment

According to veteran diamond dealer and grading expert, Willa Schoeman, there are three reasons why diamonds is the kind of investment vehicle South African investors need to include: the gems’ consistent and competitive performance, their portability, and especially diamonds’ world-wide US dollar price structure. With these three key points in mind, investment diamonds are surely a must-have in any astute SA investors’ investment portfolio.

“…once you invest your South African rand in diamonds, your money has effectively been converted to US$ currency and therefore virtually immune to a weakening SA currency,” says Schoeman.

The Rapaport Report

In order to establish an internationally structured valuation, a weekly guide of diamond prices is published according to supply and demand, and market outlook. This means that a diamond's value is converted from local currency to US$, a move brought about by in the late 1970s by maverick diamond trader Martin Rapaport’s eponymous Rapaport Report. Creating a stir in the diamond industry at the time, Rapaport’s efforts to establish diamonds as a commodity resulted in a stable, more structured standard to which diamonds are valued.

The unique value of grading

The value of diamonds are predominantly based on grading, with diamond dealers employing international grading laboratories who consider a number of factors when valuing a diamond. These laboratories do not trade in diamonds – their purpose is to render an objective service to the diamond industry.

“Taking the 4 value-contributing factors of Carat, Cut, Colour and Clarity into account, these international laboratories grade and certify each diamond for its unique qualities…

“…each and every one is unique, like a human finger print. Because of this, each diamond can be identified and uniquely certificated. The certified diamond, with its specific properties, then holds its value according to the current international diamond valuation,” explains Schoeman.

Movable assets

Schoeman says that one of the factors that make diamonds such an attractive investment is their portability. He says that while investments such as real estate and those managed by third parties offer stability and security, they are essentially immovable and thus influenced, directly or indirectly, by prevailing local economic conditions.

As Schoeman points out, “Once you have bought a diamond, you can keep it with you wherever you are in the world, and due to its valuation in US dollars, it is a tradable commodity, anywhere.”

Informed advice

Knowledgeable brokers, financial advisors and consultants are key to establishing diamonds as a premium investment option that offers investors both security and exceptional return on investment. According to Schoeman, diamonds is essentially a hard-currency investment linked to the stability of the US dollar, and the perfect solution for South African investors looking to bolster their portfolio against the uncertainty of the country’s economy and volatile Rand.

Find out more

To find out more about this outstanding hard-asset investment, Schoeman offers telephonic and personal meetings to discuss the investment opportunities that diamonds hold. He is the private adviser to many diamond investors and regularly hosts exclusive talks about investing in diamonds in major centres around South Africa. For a confidential discussion you are invited to contact Willa Schoeman.



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