Economics of Diamonds, Part 2

Well, it’s official. Brexit means that the UK will lose out on £440bn of the global derivatives market. That means that the UK may lose out on diamond derivatives if they will come out by the end of this year…except from my personal experience, it is highly unlikely that diamond derivatives will truly exist.

The razor thin profit margins of the jewellery industry would be eroded if diamond investment would be available for the mass market, and standardisation still remains an issue because you would have less choice in what stones you can invest in. A basket of low-quality colourless diamonds will never equal an investment into the underlying asset, which would have a higher expected return.

Although diamond investment is not destined for the fast-moving derivatives markets, it doesn’t mean that investment into diamonds should be difficult. ECN Investments can help with the entire investment process from start to finish, and even help with reselling the investment diamond at competitive prices. Contact us today to see how we can help.