Colored Diamonds as investments??

[Haywood74]

I was checking the spot price of silver and gold this morning and saw a banner link to this company http://lp1.rarediamondassets.com/. Anyone have any experience with the people who are offering this??? If so, how is this set up???

 

[LD]

Unless you have a bank balance that means you can purchase stones that have many zeros after the asking price, you are highly unlikely to realise an investment from fancy coloured diamonds or any other gemstones.

The ONLY gems that will be an investment are super rare, super expensive and out of most people's range I'm afraid and even then, you have to find a buyer! There are exceptions such as gemstones that are no longer mined and in short supply BUT it only takes a new find for them to become common rather than rare!

Don't buy gemstones as an investment - only buy them if you love them and couldn't care if they lose money. Please search this forum as it's a regularly asked question and you'll see that without fail the answer is always the same.

 

[Haywood74]

I know that generally gemstones are a bad "investment" so to speak unless you are retailing them, but this appears to me to be some sort of a company that is offering up a chance to buy into as part of a group. If I am guessing right here, it's probably going to be like a mutual fund type setup where many people are buying into a pool as opposed to a direct investment per stone. I could be way off here, hence this thread.

I should preface this with the fact that I am not looking to invest, rather I saw this and all kinds of red flags similar to what I think most of us who read/post here would have. I don't want anyone getting taken for a ride, BUT, if this is a legit opportunity, then maybe it is something worthwhile to discuss on here. I have no dog in the hunt here as this is more of a curiosity than anything to me that someone is advertising Colored Diamonds on what is most likely the most highly hit page on the internet for commodity investors checking the prices of precious metals. This appears to me to be something TOTALLY different than a casual poster thinking they can buy diamonds off of Craigslist and resell them to make a living.

 

[LD]

It's a scam. Several months ago somebody started a thread on exactly the same type of company. Steer clear. I'll see if I can find it in the archives but it might be difficult!

Edit - Found this - I haven't opened the links again so can't check whether it's the same company but thought you might find it interesting:

[URL='https://www.pricescope.com/community/threads/gem-stones-as-an-investment-experiences-knowledge.149791/?hilit=investment']https://www.pricescope.com/community/threads/gem-stones-as-an-investment-experiences-knowledge.149791/?hilit=investment[/URL]

 

[Haywood74]

Thank you for the link! I don't know if this is the same company as talked about in the other thread. I am going to look and see what I can find about this offering. For what this is worth, the link that I clicked to find this place lists that the company is a member of the Jewelers Vigilance Committee? I don't know if this is legit or not, but it's clearly put out there to add some legitimacy to what is being offered.

If this company is scamming people, it's high level. As stated earlier, I found the link as a banner ad on Kitco.com where almost everyone who is looking for current spot metal price goes to get that information. Usually, the banner ads are for legit investment opportunities in companies dealing with precious metals. It caught my eye because of where I found this company advertising.

More to come...

 

[Haywood74]

Here's what I have been able to determine about this company so far...

definitely NOT the same company as listed in the previous thread...that one was GlobalRoyalties.com from Ontario...

typed in the toll free number advertised atop rarediamondassets.com to Google and top page was this link:
http://www.prweb.com/releases/2011/11/prweb8974039.htm

Googled "Shadd Vickery" and came up with this page:
www.shaddvickery.com

checked the links page and went to YouTube channel where 3 or 4 videos were posted about diamonds, user name added to title, but does not appear in any videos listed...

checked BBB, no company records found....

checked JVC, no company listed there as claimed in the searchable database of members....contacted JVC to verify membership and any possible complaints...

requested "investor kit" and am awaiting it's arrival....


If someone could verify my findings above, it would be greatly appreciated!

 

[LD]

I bet that the pack you receive will have:-

1. tons of information about famous (large) diamonds that have increased in price - marketing hype to grab attention
2. tons of information about different coloured diamonds and their "rarity"
3. lots of information about famous people buying coloured diamonds

and then

4. Links to where you can buy FCDs. My guess is that they'll be overinflated or will have some scam as to how you can purchase them on some sort of scheme.

Honestly, to make claims that FCDs beat inflation is wholly misleading. Look at it this way, say you buy a natural blue diamond of under 1ct (which will be costly), if you keep it for a year and then decide to sell, you've already paid a buyer's premium so will the diamond have increased by that much in the second hand market AND can you find somebody to sell it to? Probably not. In 10 years? Maybe but that's for a natural blue. If you buy natural yellows I suspect the answer is no.

Don't get me wrong because I'd love it to be true and in which case I'm sitting on a ton of money but the realist in me says that hell will probably freeze over before that happens in my lifetime!

 

[Haywood74]

Well, I created a bunk email address and got a telemarketer's number off of my caller ID to use as contact information. If this is a 100% scam, they are gonna have some fun trying to call me at least

As stated, I am not looking to invest in this at all. I'm looking at it more for the curiosity of how this is starting to appear more and more as a scam.

 

[LD]

I can't wait to hear what happens!

 

[Haywood74]

I got a reply from JVC....membership has been applied for, but not yet granted

HMMMMMMM

 

[kenny]

I have bought a dozen lovely FCDs from a legit vendor.
I have no expectation that I'll ever make a dime off them.
If we buy at retail prices we have to sell for much less.
Even then you have to find a buyer, not an easy or quick task.

Unlike gold the spread between the buy and the sell price of FCDs is huge.
So much for the investment potential - unless you kept them for decades AND the value continued to rise, which is not guaranteed since new mines may be found.

Recently we had a poster who reported he bought a pink diamond from a private party (no middle man or company to pay) that was one of the most desirable pinks available.
[URL='https://www.pricescope.com/community/threads/how-to-determine-if-my-pink-diamond-is-from-a-argyle-tender.169219/']https://www.pricescope.com/community/threads/how-to-determine-if-my-pink-diamond-is-from-a-argyle-tender.169219/[/URL]
QUOTE: "The original purchaser paid $125,000 US dollars including taxes in April 2008. I paid $58,000 USD in May 2011."

Granted, we only heard one side of the story and even if there was a bit of exaggeration going on, still, this thread was a great reality check.

That said I DO think FCDs could serve as a hard asset, like real estate or gold, that retain some value if stocks were to crash.
Even if you paid $125,000 and got only $58,000 back that's better than getting zero back if your stocks went to zero.
IMHO, you should primarily buy FCDs for the enjoyment, but there may be some logic in seeing them as a very small part of your long term investment portfolio.

 

[kenny]

I was checking the spot price of silver and gold this morning and saw a banner link to this company http://lp1.rarediamondassets.com/. Anyone have any experience with the people who are offering this??? If so, how is this set up???

Here's a bad sign.
In your link above and the other one you posted ( http://www.rarediamondassets.com/ )there is an image of a blue diamond.
It was stolen from the legitimate vendor who is selling the diamond . . .
http://www.fancycolordiamond.net/search/fancy_colored_diamond_details.cfm?id=6027

Here are both pictured below.
Look closely and compare the location and shape of every shadow and every bright area, the shadow under the diamond, the even angle of the stone, everything is identical.
How can an "investment" company expect to be trusted when they are stealing images without giving credit to the owner of the image?
Plus if they could sell you THAT stone (by selling it FOR the seller) how could they offer a good price if there are two selling-mouths to feed?
IOW if you want that stone buy it from the seller who has it in his vault, not a broker who doesn't own it.

 

[Haywood74]

Good eye there Kenny! I think this is all adding up to a not-so-good thing for potential investors. As I said before, I am still kind of awes-struck that they were advertising on Kitco. That place gets a lot of serious investors visiting with some seriously deep pockets.

 

[kenny]

Accepting advertising from an unethical vendor is nothing new.

Advertising is not endorsement; it is just money changing hands.

 

[Haywood74]

Accepting advertising from an unethical vendor is nothing new.

Advertising is not endorsement; it is just money changing hands.

Hence my thought that if this is a scam, it's high level and well funded. Advertising is not cheap and neither is the website that has been put together to promote that company.

 

[Rockdiamond]

Scam is such a harsh word.
For example, I'm waiting on this new exercise machine- I've already bought smaller sized clothes as it's guaranteed to work!


Seriously- Kenny raised some amazing points.
IMO any company pushing diamonds as an investment is simply playing on the human desire to easily win (loose weight, make money, find love,etc..)
They look to be organized to some degree, therefore probably have a good "kit" to send- and I'm very interested to see what they ultimately offer.
But IMO this type of advertising is bad for consumers- and honest representation of diamonds as a whole.

 

[TristanC]

I think the summary is that FCDs are like any other expensive hobby. Money sinks, but extremely pleasurable. If you are lucky, in the distant future what you collect may be worth a lot.

The extreme end of the market, i.e. the gems only sold at auction are the ones that are most likely going to be good investments. Even then, you deduct the auctioneers fees and you end up having a huge chunk of profit being taken off... it is just hard.

But I would buy more of them in a heartbeat if I only had the means. My two little half carat pinks and chameleon are lonely, and can't wait for more additions to the family!