Investing in Diamonds
The Best Kept Investment Secret!
Gold, Silver, Platinum, Copper, and many other commodities have had returns of 50 to 300% in the last year and show no signs of a turn around, but I believe that the bulk of the profits have now been made.
So what would you invest in if you don't expect another banner year in the Stock Market, and you need a hedge for your Real Estate Portfolio?
What I have come to understand is that diamond mines across the world are coming under duress and that diamond prices will soon shoot up along with other inflation hedges once word gets out. The "Smart Money" is already making bets on heavy upward pressure on diamond prices and I believe that we will soon see some great returns.
So how does one take advantage of this next commodity rally? Well first off, Do Not goto your local Jeweler and purchase a one carat diamond for $3000 that appraises for $4000 and think you just got the deal of the century and will recapture your initial investment plus a great return in a year.
This is Not the way. If the appraised value of a diamond is lets say $10,000 then that jeweler is purchasing that same one for $5,000 in New York. So pay no more than 50% of the appraised value and try to pay even less!
A good place to start is Ebay, I have found some great deals on loose diamonds and have made some great returns on flipping them. I usually shoot for a return of 20% with little hold time.
I was previously purchasing gold by the ounce and have now found that the margins are no longer there to trade it on ebay. Everyone is bidding gold up around $1650 per ounce limiting any upside potential unless gold continues to make headway from the high its already reached. This I have limited confidence in.
If you have a hard time finding investment grade diamonds (size of .75 ctw or better, loose no fittings, and clarity of SI2 or better) than contact me and I can help point you in the right direction.
Currently my portfolio is looking like this for 2012:
25% Real Estate, (80% residential, 20% commercial)
25% Stocks, Mutual Funds, Gold, Diamonds
25% Business Holdings (10 to 50% interests in various companies I have invested in)
25% Cash (no matter how good your balance sheet looks, if you have no cash, you are Broke!)
A Girl's Best Friend Is Soon Going To Be An Investor's Best Friend!
Below is a classic picture of an Investment Grade Diamond