We just came across a few articles on internet regarding relevance of Diamonds!
If you don't want to got through those lengthy articles, we summarize here the points that are said against Diamonds:-
1) De beers misrepresents demand / supply of Diamonds
2) Diamond increments more than Gold / Silver
3) Diamonds have no resale value
We try to counter these misrepresentations for this otherwise clean, sophisticated, organised, high yielding, highly employing trade.
1) For Diamond trade De beers rather facilitates demand / supply.
2) It also controls production of Diamonds and hence makes sure that this valuable thing doesn't go into the hands of terrorists, rebellion movements etc. Because they need to hide their huge black money and diamonds drastically reduces the money storage requirement! Gold is there, but if a nut size diamond can accomodate lakhs of dollars than a diamond is a bliss for them!
3) Kimberley Process Certification Scheme (KPCS) is the process designed to certify the origin of rough diamonds
from sources which are free of conflict funded by diamond production. The certification scheme aims at preventing "blood diamonds" from entering the mainstream rough diamond market.
4) Diamond has a resale value, as u can see it selling in all bourses, antique houses like- christies, bonhams etc. All big companies / stores which sell diamonds have effective return / buyback policies!
5) The prices of diamonds are controlled through Rappaport report , which facilitates even layman to know the approximate price of a diamond based on its color/carat/clarity and hence avoid a cheat.
6) The percentage increase in the prices of Diamonds have been on a slow graph since many years. Gold & Silver have rather exaggerated a lot more than Diamonds.
7) Grading of diamonds have been put into place so as to avoid cheating etc.
8) Diamond traders themselves teach customers about 4 Cs of Diamond.
9) Diamonds enhance beauty, makes an asset, is an investment!
10) When we buy Rs 30000/- cell phone every year which sells for not even 25% of the cost price, a few lakhs car with depreciating price, an art work painting for lakhs in the name of some unknown artist then why not diamonds for a few thousands? When you buy Diamonds you have full surity to sell it at the cost price within few months & you will also get incremented price after few years that too after satisfying you fashion whims with it! Does any tech gadget, any car, any electronics, any other luxury item provides such an option?
This doesn't means we stop buying other items and only invest in Diamonds, every thing has its own place and you should decide the percentage of your income to be spent on all.
11) Investing in Diamonds would require a lot of money but would never demand more than 20-30 % of your spendings on luxury items or 5% of your investment portfolio. And whatever you have invested in these precious stones can be encashed anytime and that too at a higher price!
12) Diamonds are a choice of high-end market, and why it shouldnot be? When a person can spend Rs 5 lakhs just like buying peanuts, then why should not be there a product for him to buy? If one needs a car one can buy a Nano or a maruti zen, which give good mileage, have AC etc., then why do people buy a mercedes or other more rich people buy a rolls royce or a jaguar?
13) Just google any country's direct / indirect tax earnings from Diamond trade.
14) Just imagine the employment this trade has given to a huge mass all over the world! From mining in Africa to polishing / trading in India & Israel to retail stores in Europe / America! The figure is in staggering crores.
But still to some, these points won't be enough to stop raising finger at Diamonds....they should learn that........ it is only that pinch of Imperfection that makes this whole world Perfect.
Regards
NJ
