Having been in the gemstone business for forty years, living in Brazil, owning my own emerald mines and working with every type of colored stone since 1964, I can tell you that no gemstone investment in the world has been a better investment than diamonds. There is the occasional exception to the rule, but that is rare!
The main reason diamonds are the best investment is that the diamond industry is a monopoly that has controlled the price for the past fifty years. Emeralds used to be controlled to some extent from Columbia but that ended in 1998. In Brazil, you have small, coloured stone mines that will sell their merchandise for the best price they can get if and when they need the money. I've seen some coloured stone prices drop by 50% in the past five years. Diamonds, however, are controlled, with the price of "rough uncut diamonds" going up at least 20% per year to site holders. There are fewer than 100 site holders in the world who are allowed to buy diamond rough only 10 times per year. They, in turn, manufacture the rough into cut and polished diamonds that are then sold in your local jewellery stores.
Diamonds, or any other gemstones, are normally not considered an immediate, short-term investment if you buy them from a retail jewellery store. They are only a good, solid investment if you can buy them directly from the rock-bottom, wholesale source. If you're looking for an investment in diamonds, this means you will have to deal with a wholesaler who can buy directly from the Diamond Trading Company (DTC). Then you have a controlled investment that will be scheduled to increase on the wholesale level at 20% per year.
Most of these companies are based in the diamond districts of New York City and Antwerp, Belgium. Diamonds can be a serious investment program for serious clients that want to have their assets more liquid and make a 20% profit on their money. The investment is typically offered as a five-year plan, during which you will hope to double your money at 20% per year - but the beauty of this plan is you can, of course, sell the diamonds at any time if the necessity arrives.
You can choose or help pick out the type, size and shape of the diamonds if you wish (and are qualified!). If you let the corporation handling your investment select the diamonds, they will choose the most marketable stones in the 1 to 5 carat range; white, slightly imperfect to the naked eye. These are the most desirable stones to sell to the jewellery store industry when the time comes to dispose of your merchandise. This grade of stones will sell quickly.
What about investing in so-called colored diamonds or other colored stones? No colored stone dealers or brokers can offer this type of investment. Being a coloured gemstone broker for many years, I can tell you diamonds are the best investment in the long term. A friend of mine recently acquired 396 carats of nice-coloured emeralds that range from 0.25 to 5 carats each. A G.I.A. gem appraiser has valued these at US$90,000, but because of the flux in the coloured stone market, my friend will almost certainly sell the whole lot for just $30,000.
In 1988, when I left the USA to live in Brazil, I wanted to be more liquid because of a small difference of opinion with the IRS! I traded a farm that appraised then for $170,000 for a $140,000 lot of diamonds. Today the farm is worth in the region of $300,000 at the most. I recently traded the diamonds for a 56-unit hotel valued at over $2 million. A big difference!
After fighting the taxman many years ago, I can tell you, the more liquid you are in some parts of your portfolio, the better. Being 100% liquid, it was easy for me to leave the USA and migrate to Brazil back in 1988. I've lived a stress-free life here ever since! With carnivals, beaches, lovely ladies, football, 75-degree weather all year round (average), favourable exchange rates, ocean-front properties that can also make 20% per year tax-free - not to mention the good food and fresh, fresh fruit, that should certainly be the subject of a future article!
Expatriating to Brazil was the best move I ever made!
Dr Woody Stanley, popularly known as "Dr. Diamond", is a writer and consultant on offshore finance, diamond investment, due diligence and wealth creation matters. He lives near Rio de Janeiro, Brazil. Dr Woody defines wealth in the broadest sense, believing that money is worthless if you don't have health and happiness too. He is a regular contributor to The Q Wealth Report, a publication dedicated to publishing freedom, wealth and privacy information for a select audience. The publishers Q Wealth Limited are pleased to offer a free sample copy to readers of EzineArticles. You can visit The Q Wealth Report at http://www.qwealthreport.com
