Diamonds are not just any girl’s bestfriend – it is also a very attractive investment alternative. Annual return can range from 2.5% to 10%, depending on the color.
However, unlike gold and silver, or other investments where prices are reported on a stock market, diamonds are not traded on a public exchange but negotiated privately. This makes it harder to know the real value of the diamond, thus making it susceptible to abuse. The diamond trading industry is also unregulated – brokers are not required to be registered with a certain government authority.
A BBC news report recently warned older people who are the targets of this new form of investment scam on diamond trading. About 250 reports were received last year by the City of London Police.