Precious metal

Diamond is a crystalline, allotropic variety of carbon. It is formed deep under the earth's surface, under conditions of extremely high pressure and temperatures reaching over 1000 degrees Celsius. This process takes billions of years, and the stones come to the surface thanks to volcanic eruptions. The largest deposits are currently located in Russia, Botswana, Canada and Australia. Historically, this market has been dominated by one player – De Beers, which for decades controlled up to 90% of the world's supply, artificially shaping prices. Today, the market is more dispersed, although still concentrated in the hands of a few powerful mining corporations.

A fundamental feature of each diamond is its uniqueness. No two stones are alike, which distinguishes them from fully fungible assets like gold bars. The value of a single copy is assessed according to the international standard "4C" created by the Gemological Institute of America. It includes four key parameters:

• Mass
• Finishing touch
• Colour
• purity.

These factors, confirmed by a certificate from a reputable gemological laboratory, form the basis of the valuation. Every gemology news portal details these criteria, which are an absolute must for anyone considering entering this market.

Assessing the quality of a diamond is complex and requires specialist knowledge. To put it simply, the greater the weight, the more perfect the cut, the whiter the color (or more intense in the case of colored stones) and the fewer internal blemishes, the higher the value. For example, two diamonds with the same weight of one carat may differ in price by several hundred percent due to differences in the other three parameters. It is this complexity of valuation that presents one of the biggest challenges for novice investors.

Source of value

The value of diamonds is due to a unique combination of several factors. The first and most obvious is their natural rarity. Jewelry-quality stones account for only a fraction of the entire global extraction, which in recent years has oscillated around 120-130 million carats per year. The vast majority of diamonds obtained go to industry, where their extraordinary hardness is used. The process of formation of natural diamonds is impossible to reproduce in a short time, which makes their resources limited.

The second pillar of values is history and marketing. It is no coincidence that the diamond has become a universal symbol of love and engagement. This success is the result of one of the most effective marketing campaigns of the twentieth century, conducted by the aforementioned De Beers company. The slogan "The diamond is eternal", introduced in 1947, permanently rooted this stone in culture as an object of desire and synonymous with the durability of feelings. This emotional and cultural capital has a direct impact on the price, creating demand independent of purely investment motives.

The third aspect is durability and concentration of values. Diamonds are virtually indestructible and do not corrode. This allows you to store a huge amount of value in a very small, easy-to-transport and concealed item. This feature has historically made them an ideal asset for wealth transfer in times of political and economic crises. It is this physical nature that distinguishes them from digital or paper assets. Understanding these nuances is key, and a specialist training portal can provide the knowledge necessary to assess how these factors affect long-term investment potential.

Diamonds as an asset in the market

From a financial perspective, diamonds are a specific and demanding asset. Unlike stocks or bonds, there is no centralized, regulated market for them. Trading is mainly done through specialized dealers, auction houses, and diamond exchanges, such as those in Antwerp, Tel Aviv, or New York. Lack of price transparency is one of the biggest barriers. While there are industry-specific price lists, such as the Rapaport Price List, they serve more as a benchmark for professionals, and the final transaction price depends on negotiations. For this reason, lion money partners emphasizes the importance of working with trusted experts on every transaction.

Another important feature is low liquidity. It can take weeks or even months to sell an investment diamond at the expected price. It is not an asset that can be liquidated quickly in the event of a cash emergency. What's more, dealers' margins are significant and can range from 10% to as high as 40%. This means that the value of the stone must increase by this value before the investor can even start making money. This makes diamonds an investment by definition long-term, designed to store value for a period of at least 5-10 years. Their role in the portfolio is primarily to diversify and protect capital against inflation, not to generate quick profits.

A profitable investment?

The decision to invest capital in diamonds must be well thought out and based on the awareness of both the advantages and serious disadvantages of this asset. An undoubted advantage is their material nature, global recognition and the already mentioned high concentration of values. They are a portable, discreet, and durable asset. In times of economic uncertainty, they can be a safe haven for capital, regardless of fluctuations in financial markets. A well-selected, certified stone with above-average parameters has a great potential to maintain and even increase its value in the long term.

On the other hand, the list of challenges and risks is long. The investor must take into account several key problems:

• The lack of standardization and funginity means that each stone requires individual pricing.
• The market is illiquid, and transaction costs are very high compared to other asset classes.
• The lack of regulation and a central exchange leads to low price transparency.
• The growing quality and popularity of synthetic (laboratory) diamonds may affect the perception and price of natural stones in the future, especially smaller and lower quality ones.

The key to minimizing risk is education and access to reliable information. The market analyses provided by the lion money partners portal, as well as training presentations offered by experts, allow you to better understand the dynamics of this sector. Detailed studies on price trends, published  by the lion money partners news portal, can help identify market segments with the greatest potential. And access to educational materials, such as training presentations from lion money partners, is essential to learn how to verify certifications and assess merchant credibility. Ultimately, a successful diamond investment requires knowledge, patience, and often the support of a trusted advisor.

Diamonds are therefore not a typical investment for everyone. This is an offer for wealthy, patient investors who are looking for a way to diversify their portfolio with physical assets and are ready to freeze their capital for many years. Investing in them without in-depth knowledge or expert support is fraught with huge risks. It requires an understanding of not only the principles of the 4Cs, but also market mechanisms, psychology, and cultural trends.

For most individual investors, stocks, bonds or precious metals such as gold will remain much simpler and more accessible assets. Diamonds, although beautiful and valuable, in the world of finance play the role of a niche, elite component of the portfolio. Their real value to the investor lies not in the promise of quick profits, but in their ability to survive almost any crisis – just as they themselves have survived billions of years in the depths of the earth. It's an asset for those who think in terms of generations rather than quarterly results.