A drooping dollar and inflation worries have bolstered the price of gold and other commodities that are generally considered robust investments in rocky times.
Do diamonds share the same luster?
In most cases, no. Some investors buy diamonds in the form of mining company stocks, many of which are not listed on an organized exchange or on Nasdaq; a larger diamond-mining company, Mountain Province Diamonds (MDM) is listed -- and is up 51% so far this year. The bump appears to be based more on speculation, however, because the company's mine isn't yet producing. You can also get exposure to the diamond market through jewelry company stocks such as Tiffany & Co. (TIF - Get Report) or Zale (ZLC).
But for most people, diamonds are bought and sold through a jeweler. Many a groom has found himself convinced to spend a big chunk of his yearly salary because of the stone's perceived "investment" benefits. But for those who think they might be able to resell individual diamonds at a profit, the chances are mighty slim. Diamonds usually are a way to spend money -- sometimes a lot of money -- not make it.Crystallized carbon -- what we call diamonds -- is rarer than other forms of carbon, such as the carbon dioxide gas that wreaks havoc with global temperatures. Elemental carbon in all forms, however, is a common substance. It's in food, clothes and gasoline. Under intense heat and pressure, elemental carbon can form gorgeous diamond crystals, but those conditions can be duplicated in a laboratory. As technology improves, it's likely that more and more man-made diamonds will come onto the market.