Diamonds: A Rising Asset Class

Press/Media: Expert Comment

Period1 Dec 2015

Media contributions

1

Media contributions

  • TitleDiamonds: A rising asset class
    Degree of recognitionInternational
    Media name/outletSingapore Diamond Investment Exchange
    Media typePrint
    CountrySingapore
    Date1/12/15
    DescriptionLow, Yao and Faff (2015) added Rhodium to the existing precious
    metal group (Silver, Gold, Palladium and Platinum) and high quality
    physical diamond prices to their analyses. Low, Yao and Faff found that
    that 1.0 carat D flawless diamonds stood out as a strong hedge and as
    a safe haven asset. During the global financial crisis of 2008, the
    authors found that the price of 1.0 carat diamonds experienced the
    least volatility and in particular, 1.0 carat D flawless diamonds rose in
    price when financial markets collapsed.
    The authors found that physical diamonds provided satisfactory
    performance when markets are the most volatile and should be
    included in a portfolio for their downside hedging potential. A strong
    negative correlation is seen in top quality flawless diamonds and
    international equity markets. Hence, one of the key advantages of
    holding top quality physical diamonds is that they continue to have a
    strong store of value, providing price stability and possibly even
    appreciation during periods of market turmoil.
    PersonsRand Low