Page 140 - OCEAN BLUE - FALL 2016

PORTFOLIO
By: Daniel J Penseyres.
Show me a woman who doesn’t
like a big MAC
Commonly known as a DIAMOND...
A lthough the obsession with
precious metals goes back
hundreds or even thousands of
years, diamonds are relatively
new. Like many other gemstones, the value of
diamonds is linked to their (supposed) rarity
and high demand (supply and demand).
So why is it that many men feel the need to
spend their hard-earned cash on this tiny piece
of carbon to propose to their chosen one?
Indeed, women expect a diamond ring as part
of the engagement process. Social pressure
certainly plays a role in this, as has the media
140 WWW.OCEANBLUEMAGAZINE.COM
(Metastable Allotrope of Carbon)
that portrays high profile events such as the
engagement of Richard Burton and Elizabeth
Taylor as being sealed with a 68-carat diamond,
or as proclaimed in the Marilyn Monroe movie
classic, Gentlemen Prefer Blondes, where
diamonds are a girls’ best friend.
From a financial perspective, however, how can
these pieces of carbon become an inevitable
part of a diversified portfolio? It is important to the headlines with diamond auctions where
learn a little about such investments first. For
example: Which categories of these valuable
stones represent the best form of investment?
Would the addition of diamonds positively
diversify one’s portfolio for better risk-adjusted
returns? What about liquidity (the ability to
exit the investment without a significant loss)?
The diamond sector is notorious for its lack
of transparency that makes it difficult for
investors to distinguish the risk factors and to
adequately analyze profit opportunities against
possible losses. Auction houses regularly hit
records sales are widely publicized. Most
recent rarities auctioned include a 12.03-carat
blue diamond in November of last year and a
1,109-carat Lesedi La Rona in May of this year.