What are Diamonds?
Most natural diamonds are formed at high temperature and pressure at depths of 140 to 190 kilometres down in the Earth's mantle. Carbon-containing minerals provide the carbon source and the growth occurs over periods of time. Diamonds have an extremely rigid lattice, and because of this, it can be contaminated by very few types of impurities such as boron and nitrogen.
Unlike most precious metal investments, diamonds do not have a linear pricing structure. This means a greater understanding of which diamonds will have a significant increase in value and which diamonds will attract a greater resale value. Purchasing a diamond at a retail price as opposed to a wholesale price can be a detrimental error. If a diamond is purchased at retail pricing, then the length of time to return a profit is increased dramatically due to the extra initial outlay.
Why use Diamonds?
Diamonds like most precious metals are seen as a form of security which provides a valuable or tradeable item. Prior to the introduction of money, precious metals were used to buy and sell goods. This form of currency is still seen by some investors as a safe haven if in the unlikely event the world economy were to fail.