“A Diamond Is Forever” – De Beers Own Slogan

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What is meant by price control of diamonds?

The origins of the present day price control began with Cecil Rhodes, who initiated the policy that is today the basis of price control in the diamond market. Rhodes believed that the only way to control wide fluctuations that could occur in diamond prices, variations in supply and demand, was to control production at its source through the mining claims and companies. This original policy of Rhodes' has been maintained to this day. [ Check for £ 5,338,650 ]

How is this done?

Control is acquired through the purchase of controlling interests in diamond producing mines and by persuading the owners of other mines not under direct control that it is better to sell fewer diamonds at higher, noncompetitively prices through a single selling organization than it is to permit prices to fluctuate freely. Control of production is intended to avoid an oversupply in the world market, resulting in price wars and reduced profits.

When did this occur?

By means of amalgamation with most of the more affluent companies and by outright purchases of some of them, Rhodes eventually brought the whole through the possession of the company, and this occurred in approximately 1887. DeBeers mines 40 percent of all diamonds, controls 80 percent or more of all diamonds marketed, and is in control of all the important productions of the world. With the technique suggested by Mr. Rhodes, it is now possible to design and conduct mining operations systematically and economically, and to regulate output according to the market demand. Stability and prosperity of the mining industry still depends on these great principles.

Other than DeBeers' control, are there any other reasons for diamond stability and value?

Yes. It is probably based on history, in that diamonds have been embedded in our culture, and since earliest times have been a symbol of value and power.

How is marketing controlled?

The policy of DeBeers as leaders of the diamond industry is to maintain a high degree of price stability for gem diamonds at all times, so the trend of demand is upward. Setbacks have been experienced from time to time affecting sales in general or sales of particular qualities of diamonds. For this reason the group builds up large financial resources in good times, so that the purchases from producers can be maintained and the excess production held in stock when the market is weaker. When the demand improves, these stocks are offered to the market, thereby restraining any upward pressure on prices.

What about price stabilization?

The Diamond Corporation, Ltd., a subsidiary of DeBeers, contracts with various important producers who are not members of the Diamond Producers Association for the purchase of their productions. Diamonds are also purchased on the open market in Africa and elsewhere by associated companies of the Central Selling Organization. Mr. Oppenheimer, Chairman of DeBeers, has stated. "A degree of control is necessary for the wellbeing of the industry, not because the production is excessive or demand is falling. but simply because wide fluctuations in prices which have, rightly or wrongly, been accepted as normal in the case of most raw materials, would be destructive of public confidence in the case of a pure luxury such as gem diamonds of which large stocks are held in the form of jewellery by the general public." He further quotes, "Whether this measure of control amounts to monopoly, I would not know, but if it does, it is certainly a monopoly of a most unusual kind. There is no one concerned with diamonds, whether it is a producer, dealer, cutter, jeweller, or customer that does not benefit from this. It protects not only the shareholder in the big diamond companies, but also the miners they employ and the communities that are dependent on their operations. The wellbeing of tens of thousands of individual diamond diggers of all races depend on its maintenance . . ."

What do bankers think of diamonds?

This depends on the familiarity of the bank with the market. A Swiss banking report suggests the investment of up to 15 percent of one's capital in diamonds is a responsible and commendable thing to do.

Why diamonds are considered safe currency?

The reasons are numerous, but diamonds possess stability second to none. They are never the object of governmental or administrative measures which tend to alter price values, of yardsticks out of general or financial considerations. No restrictions or devaluation's can affect the diamond economy. The fact that diamonds do not bear the stamp of any particular government or central bank has been vital in making them an accepted international currency.

Why are diamonds accepted as currency?

One very important reason is that the Central Selling Organization has built up diamond prices over the years as the best hedge against inflation. It has insured the value of the purchasers' funds against all rises and falls of currencies around the world. It has the stamp of approval of no government, but has been increasingly accepted as international currency.

Can diamonds be used as bank collateral?

Not at all banks, but at many. Diamonds are recognized as stable collateral for loans.

How do diamonds compare to real estate, lots and/or multiple dwellings for investment purposes?

Real estate has its place in any investment program; however, diamonds have one thing that no other investment has, and that is its extreme portability. As mentioned previously, you can carry a million dollars worth of diamonds in your pocket and sell them anywhere in the world. It is impossible to do this with any other investment and real estate, of course, in particular.

What about investments in diamonds?

The diamond investor is not interested in the diamond as jewellery per se; he is interested in the loose gem. He feels that there is an advantage to investing in diamonds rather than stocks, bonds, real estate, gold or art, and one of the most important reasons for this is that there are no limitations on its mobility.
If you do not have holes in your pocket, you can carry your fortune with you.
In addition, diamonds appear to be relatively immune to currency fluctuations. Investment in diamonds is essentially a sign of scepticism about the world's political situation. Most of us in the diamond business are convinced that the market can go in only one direction - and that is up.

Are diamonds better than gold?

Basically gold is a speculative investment. It does not produce income and there are no guarantees for capital appreciation. When inflation is high and there is international uncertainty. the demand for gold, either as a commodity speculation or as a horde. helps to increase the price. Investing in gold is risky. Its price can fluctuate widely, and at times the price of gold can rise to a point where it offers little protection and a lot of price risk. Diamonds are totally controlled with their prices based on the world's strongest currency or gold, whichever is most valuable. Thus diamonds offer a built-in resistance to devaluation. As currencies lose their value. diamonds automatically adjust upward.

Are diamonds a safe and stable investment?

The prospects for diamond trade are excellent in our present prosperous society. Because of the improvement of the standard of living, more and more people are becoming increasingly attracted to the gem and diamond markets. Diamonds have always held a particular fascination to people because of their fire, their beauty and their rarity. In times of monetary devaluation and fluctuation, diamonds constitute a guaranteed safe and stable investment.

What diamonds can be considered an investment?

The best values are those of finer qualities, irrespective of size or shape. Probably the best sizes, however, are between one and three carats. Loose diamonds are preferable, as settings go out of style.

What stones should be purchased for investment?

Roughly speaking, stones between one and three carats with the main purchase being centred in round, brilliant-cut stones between one to one and one-half carats. If larger purchases are to be made, the money should be spread over a number of stones, rather than one particular one, and the purchaser should plan to retain the stones for at least five years - with three years being considered the minimum.

Is a diamond ring a good investment for a young man about to be married?

A diamond ring will be his wife's dearest possession as long as she lives. In return for this, she will cook for him, mend for him. Keep house for him, and generally make him happy for a lifetime. In addition, a man usually spends much more for a car, television set and many other items which will rapidly wear out or have little monetary value within two to five years, but a diamond ring will be there forever.

You say diamonds are a good investment, but they do not pay any dividends.

It all depends what you mean by dividends. Diamonds pay dividends when they are worn as jewellery, day in and day out, because of the enjoyment they give the wearer. Furthermore, you cannot wear a deposit slip, stocks or bonds. Diamonds can always be sold, and there has been a increase in the wholesale value. You also have to invest a great deal more in real estate, insurance companies pay only a fixed amount of money, and stocks go up and down. Diamonds certainly hold their value better than a Cadillac, a yacht or a mink.

When is a diamond an investment and when is it a gift?

To a certain extent, people in some countries have recently termed the buying of diamonds as some form of investment; but when a man buys his wife a $10,000 diamond ring or piece of jewellery, it is partly a gift for pleasure and partly an investment. It is difficult to define which purchases are strictly one or the other.

If a man has a savings of $10,000-15,000, would he be wiser to keep the savings account or purchase diamonds?

If he does not know anything about diamonds and does not know anyone that he can trust implicitly in the diamond trade, he would be better off keeping the savings account.

Based on a $15,000 - $50,000 savings account and a diamond of similar value, how much interest can I expect to earn?

No dogmatic answer can be given to this; however, in the past diamonds have appreciated close to 5 - 15 percent annually.

If you were recommending the purchase of diamonds as an investment, what percent of the man's capital should he spend?

Approximately 10 to 20 percent of his assets can be invested in diamonds. I would also advise him to hold these stones for a period of at least five years.

What size diamond would you consider ideal for investment by a middle-class working man?

Diamonds certainly are not out of anyone's reach. As mentioned previously, from an investment standpoint stones of round, brilliant-cut and about one carat or slightly above are the best. However, diamonds of any size are valuable and the average cost of a diamond engagement ring in the United States is between $200 and $1.000. Actually, there are diamonds for everyone's budget, just as there are clothes, houses and automobiles to fit different and varying pocketbooks; but with this difference, and barring loss or crushing, a diamond is forever while other items will wear out and become worthless.

What would you consider the ideal diamond ring for a man or woman from an investment and beauty standpoint?

Actually, there is no ideal diamond ring for a man or woman. It is an individual taste as to the style of mounting. As far as the diamond is concerned, it should be the best one can afford, preferably of the round, brilliant-cut, as these are the ones that have always been in the greatest demand and the greatest trade-in valuation.

What are the reasons for this?

In general, there is a prevailing anxiety about the stability of international currencies and lack of confidence in more conventional investment fields. There is also a growing shortage of good quality rough diamonds, add to that DeBeers' marketing quality which insures that the supply never exceeds the demand: all these things together are instrumental in maintaining the upward pressure on prices.

What is the present opinion of the business world relative to the value of diamonds?

This is a quote directly from the Diamond News and S.A. Jeweller, "In spite of the ferocious bite of inflation and the search for evermore rewarding investments, the diamond has never lost its appeal. Especially now when it seems that day by day the value of the paper rand is steadily eroded, while the solid value of the diamond, if it does not make any sensational leap upwards. at least does not lose its hardening gleam."

Is there any other reason why so much confidence has been placed in diamonds?

Mr. Joseph Goldfinger, a well-known international diamond businessman, states, "There is no other commodity in the world where a comparable volume is so carefully shielded against speculative manipulations."
The Central Selling Organization's ability to balance the supply and demand has proven itself over the years as the best insurance against any deterioration in the stability of the diamond market.

How does the market value of emeralds, rubies and other colored stones compare with the market value of diamonds?

The market value of diamonds is reasonably controlled and stable, with relatively definite prices for each class of diamonds. As far as the market for other colour stones, even including emeralds and rubies, it is extremely volatile and depends a great deal on the vogue or fashion at the time and the demand for any particular colour stone. Each colour stone has periods when it is in demand, and since the mining of these stones varies markedly, it is impossible to have an ordered market.

What is the main difference between the colour stone market and the diamond market?

While colour stones lack a controlled market or any control over the price movements, diamonds benefit from a regulating hand, starting indeed from the mine and continuing right through all the subsequent processes.

What steps should a person follow when shopping for a diamond?

The first thing to look for is a place where you are totally confident.

Is there any key to diamond buying?

As mentioned in the previous question, it is knowing someone you can trust and someone whose knowledge you have confidence in. You must find people who know diamonds, know the market and who have those priceless assets - honesty and integrity.

Can you make a better diamond purchase in the United States than in Europe?

The answer to that is No. If you look around, you can get an excellent buy in Europe.

Can the average person buy wholesale?

It is almost impossible. A lack of knowledge in either the wholesale or retail market puts the customer at a distinct disadvantage. You either must know your product or know from whom you are buying.

Can a bargain hunter find a wholesaler and avoid the carriage trade stones?

Only if he knows his business and knows the wholesaler. Many of these dealers tend to handle only lower-grade stones. Small-time dealers are usually so short of capital that they have to pay premiums of 10 percent to get credit from the wholesaler, 10 percent to borrow the diamonds and an additional 10 percent because they can afford to take only a small quantity of stones at a time.

How much does a one-carat diamond cost?

The answer, as we have read in previous questions, is that it all depends on the stone. Diamonds all have little differences, so that each graduation of colour, each inclusion and each derivation in cut alters the price a little.
Asking how much a one-carat diamond should cost is like asking how much a car costs. Similarly, diamonds have characteristics that determine costs too, so there actually are no fixed prices for diamonds.

What percentage of diamonds on the market fall into the high-grade category for investment purposes?

Only about 1.5 to 2.5 percent falls into the high-grade category or only about 100,000 carats of high quality diamonds annually would be considered as a high-grade investment.

Are diamonds only sentimental - or do they have business common sense?

A value-proof investment requires a well-thought-out information campaign backed by an authority of the highest body, namely The Diamond Trading Company. It should also be noted that no other commodity compresses such great value into such a small volume. The world diamond business is in the hands of an organization which, while enjoying the highest confidence of the financial community, applies constant supervision with the aim of maintaining the international value of diamonds. This is meant to avoid, as well, the influence of any passing purely speculative conditions which characterize the market on other commodities, particularly gold. The difference between gold and diamonds as a sound investment is therefore readily apparent. The measurement of the gold may be changed overnight by international financial bodies with differing and often conflicting interests, where the diamond is a commodity regulated by a powerful central organization. And it is this difference -stability versus variability - which highlights diamonds. In fact. diamonds can be considered as a commodity which might be safely regarded as a truly international currency accepted all over the world.

Do diamonds have liquidity?

Diamonds are recognized and accepted universally as valuable and can be traded most anywhere in the world. They have been used in trading since 600 BC.

What about the value of diamonds during depressed times?

Since DeBeers largely controls and supports the market and withholds supplies when the demand lessens, it largely accounts for the fact that during depressions diamond prices decline much less than any other index.

Have diamonds had any recent recession or drop?

In the recession year of 1970, diamond prices levelled off but did not drop. It is almost axiomatic that diamonds never go down in price. In recession times fewer sales may be made, but in general, the prices are not lowered.

Why have diamonds risen steadily?

During the past few decades, the rise has stemmed from the general control exercised by The Diamond Trading Company in making up with adjustments according to the market, the availability of the rough and the world economic conditions. There has never been a decrease, though there have been market fluctuations. Diamonds represent wealth because they are portable and give the greatest value in the smallest bulk. They have always been regarded as an article of investment, but never more than in the present inflationary eras.

So you think diamonds will ever saturate the market to cause prices to drop?

No. This has never happened in the past, nor is it likely to happen in the future. As long as the world shall last, there will be a demand for these beautiful stones.

Finally:
Why should I buy my Diamonds from Mirol Diamond Invest?
Why should I trust Mirol Diamond Invest?
What guaranties will I have from Mirol Diamond Invest?

Many good questions in one.. So OK let us start with the first one.

1. From MDI you will always buy your Diamonds priced after, the one and only Rapaport Diamond-price-list in the whole world of Diamond-business. And please note, that all the Diamonds MDI are selling have been classified by World-wide-known-Gemmological Institute. This means that you will know exactly what you are buying and that you pay the correct price for it. As extra security, all the Diamonds MDI are selling have the certificate-number Laser-written in the Diamond.

2. About trust. Click here for presentation of Mirol Diamond Invest and I am sure you will be satisfied.

3. Guarantee. Note what we said before about Rapaport Price-list. The one and only Diamond-Price-list in the world. Also what we said about Gemmological Institute. The Laser written certificate-number in the girdle of the Diamond + our unique guaranties. Full money back guarantee. If you, for any reason choose to return your Diamond / Diamonds, you may do so. You will, of course, receive a full refund of your payment minus only our cost of shipping to you. If so, you need to be in contact with us for have the proper shipping instruction. All return need to be send to our Lawyer and Notary for full and impartial inspection of the goods. The guarantee will follow the Diamond that is send to you. The Diamond must be received in the original condition it was when you received it. The cost for shipping is only about 25 to 50 US$.

If you have questions, please send us an e-mail = gold@mirolcentre.com Welcome to contact us. I look personally forward to hear from you MIROL DIAMOND INVEST   Best regards Hans Olof Savasen                 Chairman and Principal, Member of: FEDERATIE  DER  BELGISCHE  DIAMANTBEURZEN  V.Z.W.       F.D.B.D.

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