InvestDiamond.com: Online Trading in Diamond Fractions

InvestDiamond.com: Online Trading in Diamond Fractions

Interest in diamond investing is on the rise, but many investors still have questions about the best way to get involved. After all, choosing a diamond company to invest in can be difficult, as can figuring out if a physical stone is a good investment.

InvestDiamond.com, which was launched last year by gold and silver trading platform LinGOLD.com, believes that it has the solution to those — and other — problems. The company describes itself as "the only online platform that allows members to trade in diamond fractions rather than entire stones," and is aimed at making diamond trading easy and affordable.

To find out more about what InvestDiamond.com offers, Diamond Investing News (DIN) spoke with Linnea Bruce, project manager at the company. In the interview below, she explains how the website works and who it is aimed at. In closing, she gives her outlook on where diamond prices are headed in the short and long term.

DIN: Starting off with an easy question, what is InvestDiamond.com and what inspired LinGOLD.com to create it?

LB: The concept behind InvestDiamond.com is that there are batches of diamonds that have specific characteristics, and members become co-owners of these batches — they can buy fractions as small as 0.001 carats, which means investing can start at US$15. The idea is to bring diamond investment to everyone.

LinGOLD.com is a gold and silver trading platform, and they were looking for a way to further diversify with tangible assets. They researched, doing market studies and looking at the Bain reports, and diamonds seemed like the next logical step for a new project.

DIN: Can you tell me more about the fraction trading system that InvestDiamond.com uses? It sounds pretty unusual.

LB: It is. As mentioned, members can buy fractions as small as 0.001 carats; on the website there's a trading panel, so they can decide how many millicarats they want to buy and also put in their price. The price that's there by default is a price quotation from the website, and it's calculated via a mix of supply and demand on the website, and also with respect to the Rapaport price.

The Rapaport price that we use is for a 1-carat diamond, E color, VVS1. If we see that the price on the website is starting to become a speculative bubble, or is getting too far away from the Rapaport price, then we inject diamonds into the system at a reasonable price to bring the price quotation down to near the Rapaport price.