Diamonds Are Now Rich investor's Best Friend

Investing In Diamond ETFs

As there is difficulty in pricing diamonds, the mutual funds and ETFs that are based on the value of the gemstone has remained subtle. ETFs usually work in such a way, where the companies buy and store physical diamonds, probably 1-carat, round white stones. “Shares would be issued to investors and an index created to track the changes in value within the wholesale market.” said Golan says, from Index IQ and GemShares.

Though diamonds are good commodity for investing as long as the prices are reliable and the investor understands the value of diamonds. But Fykes says, "I think the funds will have a hard time getting confidence in pricing, Currently, the industry allows a certain amount of leeway in pricing among appraisers, which is a challenge, whereas prices of gold and silver are more established and straightforward.”

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