Adamera Minerals Corp. (DDNFF)

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Diamond Investing Not for Faint of Heart

Diamonds could bring true love to investors willing to brave a tough market, but experts say heartbreak lurks for the unwary.


Dazzling numbers make the multifaceted market seem to glitter.

According to Martin Rapaport’s “Diamond Price Statistics Annual Report — 2011,” every $1,000 spent on a 5-carat diamond 10 years ago would have returned $1,645 in 2011.

A decade-long diamond investment outpaced returns in the yen, euro, and Nasdaq or Dow Jones indices, according to the report.

Rapaport, however, is cautious about investing in the market. He says normal investors have “no access to the market,” and that the bid/ask spread for items is “crazy.”

“Let’s say you have a diamond that you inherited from your grandmother,” Rapaport says. “Your ability to get a good price for that diamond would be a lot less than mine because I have more access to buyers and sellers and traders.”

Indeed, there are few vehicles for investing in diamonds. There are no futures or ETFs for diamonds, unlike precious metals. While the spot price of gold can be found for free online, or on TV, the most respected sources for diamond prices (like Rapaport’s price guides) are subscription-based and traders.”

Indeed, there are few vehicles for investing in diamonds. There are no futures or ETFs for diamonds, unlike precious metals. While the spot price of gold can be found for free online, or on TV, the most respected sources for diamond prices (like Rapaport’s price guides) are subscription-based

http://www.cnbc.com/id/46330562