There will soon be derivatives based on diamonds. A few outfits are coming out soon with some kind of diamond futures. This is only my personal opinion, but I believe we're going to see a major bull market in larger diamonds (three carets and up). Any diamond over ten carets is now considered rare.
A few years ago the Sotheby's and Christie auction catalogues were filled with larger size diamonds for sale. Now, nobody seems to want to part with their large diamonds. The catalogues have very few for sale. I believe the price for larger stones is headed considerably higher.
-Richard Russell
Diamonds are forever – or so investors in the latest alternative investment to hit the London Stock Exchange will be hoping.
Diapason Commodities Management is aiming to raise $400m for the first listed fund to invest in gemstones, buying only large polished diamonds worth more than $1m.
The fund is the latest in a series of offbeat investments aimed at satisfying booming demand for "alternative" returns that are not directly linked to stock and bond markets. Many commodities have already become mainstream, and the search for new investment frontiers has seen investors pile money into hedge funds specialising in reinsurance, wine, art, shipping, and even football players.
Diapason argues that diamond prices have lagged behind the boom in other commodities and are due for a further cyclical upswing – helped by a rise in numbers of wealthy individuals willing to buy extremely expensive jewellery, supply constraints and low stockpiles.
-Financial Times
Hmm....didn't someone put together a hedge fund for antique violins too?
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