High-priced metals and gems stones have always been the magic wand for people to not only adorn themselves but, also store their money in the form of tangible assets. While diving deeper, investing in the market of worldly-treasured metals can bring to you a splash of whopping returns indeed, provided if efficiently invested.
Introducing Gold and Diamonds as an High-yielding Investment Instrument
Similarity between Gold and Diamond Investment
Giving a thought on the investment opportunities of gold and diamonds; being two extravagant assets, they act as a symbol of wealth and status across a myriad of cultures since the ancient times. Gold, as conventional wisdom says, is explicitly timeless and is being garnered as a rewarding possession for Indians. It boasts a record of standing firm and strong against the test of time. However, with the compelling and market-driving advertising and promotional campaigns, many of us have come across the dilemma of choosing the right investment option among gold and diamonds which, can bring a host of high remunerative possibilities. Thus, here's an overview that emphasizes the salient aspects of gold and diamond investment, thereby refining your evaluation approach of making the right investment move.
- Stability Assured Option: Both these two assets remain stable and unaffected against the exchange rate fluctuations, ups and downs of the global economy or by any other external financial authority. The price of diamond is typically set up by a well-structured, supreme authority and published on weekly basis by the cartel, Rapaport Diamond Prices since 1978. This record will serve as a reference list and acts as a guarantee of stable price quotation which, is closely monitored by professionals.
The price of gold also remains much stable while witnessing inflation and other cases of economic turbulence. Both these assets have an intrinsic value and serve as a form of monetary reserve. They help investors in preserving the purchasing power and safeguard their savings.
- Potential of Crisis Management: Known for their extensive stability, both gold and diamond are considered as the safest refuge for investors in times of financial dire. Though both these assets serve as a form of precautionary savings for fulfilling your long-term objectives, gold certainly sets itself apart for being an anti-crisis asset. It works as an insurance for investors which, can be sold or utilized in the event of financial crisis. On the contrary, diamonds gain an edge for being more beneficial as an investment option that can be used in the period of recovery.
Alike the aforesaid, Gold and Diamonds can be clubbed together while considering its aesthetic value and portability, however, diamonds are comparatively more portable. Furthermore, both these two valuables are available in limited quantities, considering diamonds to be scarcer than gold indeed.
Dissimilarity between Gold and Diamond Investment
- Price Determination: The price of both these two worldly possessions vary to a great extent while taking crucial factors like clarity, colour and quality of the cut into consideration. The price of a diamond piece is determined by evaluating a number of factors. One needs to go through a myriad of aspects to evaluate whether it's worth the price or not. Unlike Diamonds, Gold investors mostly do not need additional knowledge before making the investment. The diamond investors need in-depth market knowledge on a number of several categories along with proper certification and evaluation by considering expert opinion.
- Rate of Liquidity: Considering the state of liquidity or quick cash availability, the gold market is noted to be fairly liquid compared to diamond. Gold boasts a well-established structure of liquidation that offers a host of selling options for investors including selling it to the pawn shops, bullion traders, exclusive gold jewellery stores and other investors while considering the prevailing market conditions. A higher liquidity rate and demand for gold certainly make it a valuable, profit-yielding option of earning money fast. On the contrary, diamonds are generally categorized as a prized possession with low liquidity levels and almost no scope of fungibility.
Selling diamonds at a given point of time might prove to be extremely difficult for the owner and he might have to sell the piece at a discounted rate as well. Generally, the level of fungibility for an asset is ascertained by its ability to interchange with assets of similar type which, in turn, makes the entire process of trading and exchange hassle-free and faster. Since most diamonds are distinctive in nature, it certainly becomes tough for the investor to trade in exchange of another.
- Investment mechanism: In terms of gold investment, the investors can purchase jewellery, stocks, coins and bullions directly and independently. On the contrary, a novice beginner should ideally require expert guidance for evaluating the certification and quality grade of diamonds before making the purchase. Lack of proper guidance might lead you to purchase a stone of inferior quality, thereby incurring substantial losses.
By now, we hope that the difference between these two highly adored metals has become a lot more comprehensible for you. Gold has persistently stood against the test of time for years since the ancient times whereas, Diamonds have mostly gained popularity as an exquisite metal within the last 75 years approximately. Moreover, Gold is rare whereas, Diamonds are rarer. As a well-perceptive and keen investor, you must understand that analyzing the opportunities and loopholes of investing in these two metals is of paramount importance for ensuring that you succeed in making a wise move and earn substantial returns from the investment decision.