The current rage of diamond investment among investors can be justified on a number of grounds.

They are eternal, they are available in a variety of shapes and sizes, they can be chosen so as to suit your budget from moderately to astronomically expensive, you can adorn them, particularly if you are an enchanting lady, and men these days sport them too, chiefly in signet rings. The very mention of the word diamonds builds up lustrous impressions of sparkling facets, affluence and sensational women.

Described aptly as a girl’s best friend, it fits all the standard investment norms, but is it really something the cunning investor could purchase and sell at a profit? The answer to this question surprisingly is not straightforward as the world diamond investment market is proscribed by the Central Selling Organization which is administered by De Beers. Utter the word investment at De Beers' London headquarters and the immediate reaction is an emphatic line: "Diamonds are not an investment. They are the ultimate gift and a store of wealth."

Role of CSO in diamond investment

The intent of the CSO is to poise the supply and demand to avert wild variations in the market price of the stones in diamond investment. The CSO sells diamonds per se, but it does not buy them back. Owing to De Beers' financial soundness, the company can cling to buffer stocks of diamonds not at present in demand, releasing them on to the market in a systematic course when demand grows. In the previous month Russia declared it was closing its Committee for Gemstones and Precious Metals, which governed, amongst other things, the sale of diamonds mined in Siberia. It cropped up new qualms that Russia would no longer sell its diamonds through the CSO but in parallel on the open market. If this turned out to be true, the price of diamonds could have plunged. Although the Russians to a great extent need hard currency, there is a little probability that will axe their own feet. The rough diamonds from the big producing nations that are a part of CSO go to its London offices. There, they are arranged into more than 5,000 categories as per shape, quality, color and size. Even if accessible, such a huge number of groupings are a good reason for not even weighing upon buying uncut stones as diamond investment.

Once sorted, the diamonds are merged into a sellable mixture in preparation for the 10 annual sights in London, where the rough stones are sold to some 160 clients of the CSO. The mixtures are presented at a invariable price. Negotiating is only permitted for individual stones in excess of 10 carats. Rough diamonds may not be a good diamond investment, but, how does one go about getting real worth for money on cut stones? The question may appear simple as ever, but the answer is complicated. As De Beers claims in its superb leaflet, Quality and Value, which is available from all fine jewelers or direct from the CSO, "There's more to diamonds than meets the eye."