Is it better to invest in gold than in diamonds? What are the pros and cons of investing in each type of precious metal? Today we look at a very interesting topic and one that I suppose that you’d like to gather information about to make an informed decision as you invest with the hope of reaping massively in future. Read on to discover what you stand to gain by investing in gold or diamond.
Besides being very timeless memorabilia, gold and diamond are known for being quite valuable. There are many investors who have already discovered the safety that these two precious metals present, more so when it comes to instability experienced in the global economy. As much as investing in gold and diamonds can give you impressive returns, it is necessary for you to understand what investing in each metal entails.
Key factors to consider when to invest in diamonds vs. gold
When deciding on whether to invest in gold or in diamonds, there is no outright answer. It is entirely up to you, and your personal preferences and objectives. That said, if you decide to invest in diamond, then you should consider the factors below:
- The quality of the diamond – it is necessary to ensure that you’re buying high-quality diamonds, by considering their clarity, color, cut, and carat.
- Diamond-specific terminology – I would suggest that you take the time to learn the terminology used when dealing with diamonds. You can start by knowing what the 4C’s of diamonds (color, clarity, cut, and carat), entails so that you do not get tricked into spending more money than you should. This will also help you to avoid purchasing fake diamonds.
- Certification – you should always request the legitimate certification of the diamonds you are purchasing. This may be the best way to ensure that you are getting a legit asset.
Some factors to consider when investing in gold include:
- Purchase physical gold – as opposed to buying gold on paper, purchase the physical gold and determine where you will store it. Doing this will protect you from gold shortages, and offers you the opportunity to see what you own.
- Unencumbered ownership – ensure that you are the sole owner of gold. When purchasing your gold, establish and ascertain that the company you are purchasing from does not have any rights over your gold upon purchase.
- Trusted sellers- buying gold from unregulated public online markets can pose a great risk of loss of money to you. You should, instead, buy your gold from a retailer whom you can trust.
The pros and cons of investing in gold
Whenever you decide to purchase this shiny metal, you expose yourself to certain benefits and drawbacks. One major advantage of gold is that it is usually protected from various market risks including terrorism, cyber threats, trade wars, geopolitical tension, etc. Also, gold offers you safety from inflation in the way it can hold its value over long periods of time. Also, depending on the type of gold that you buy, it is quite easy to sell it later on.
One challenge that you may, however, face when trying to purchase gold is verifying whether rare or old gold is genuine. Also, trying to store gold coins or bullion at your home may only make you a target for thieves. This is why it is advisable for you to open a gold IRA, and store your gold in a safe precious metal depository.
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The pros and cons of investing in diamonds
Diamonds are the hardest known substance on earth. They are also quite easy to transport since they do not take up a lot of space. Unlike many other precious items that you may own, diamonds do not easily wear down or break- they are quite durable. Also, you can wear your diamonds by mounting them on your jewelry.
Genuine diamonds, unfortunately, happen to be very expensive, and you cannot invest in them by opening a precious metal IRA. In addition to that, diamonds may hold their value for the long-term horizon, but not as well as gold does.
When to invest in gold vs. when to invest in diamonds
Gold is the best option for those who are looking for a safe haven that shields them against all uncertainties in the market. Many experts still believe that gold is highly undervalued and that with time, its value will increase, benefitting gold investors. One approach to maximizing your returns on gold is buying when people are pessimistic about it as an asset. You can also buy small quantities of gold from time to time, as you hold that its value will eventually increase so that you can profit.
Diamonds are on the other hand a better option for those who are looking for a higher resale value for their precious metal assets. The resale value may, however, depend on the characteristics of the diamonds, so you have to do your research carefully when purchasing your diamonds.
As we have already seen, diamonds also have a strong value retention aspect, but they cannot outdo gold in this aspect. Beyond that, gold carries more power when it comes to the provision of protection against inflation.
It is clear that the question about which of these two precious metals is better can best be answered by one considering what their objectives are. You may need to consult with your financial advisor to get their input, but it is also necessary that you do your research about what investing in each precious metal entails.
If you settle on investing in gold, however, you can get help from highly recommended and reliable IRA companies, such as the ones below:
Thank you for making it to the end of this article in which we have discussed whether it is better to invest in gold or to invest in diamonds. I hope that you found the article helpful and that you now know when it is best to invest in either option. Let me know if you have more questions with regards to investing in precious metals, and whether you would need any help getting started.
I wish you well,
Eric, Investor and Team Member at Gold Retired!