The Hallmark of Quality

   Home  ·  History  ·  News  ·  Canadian Diamond  ·  Diamond Prices  ·  Q & A  ·  Contact

Monetary Disruption

What's driving stocks and cryptocurrencies, and what's all the talk about GameStop? A simple answer might be that speculation is being driven by historically low interest rates. When interest rates rise, the markets will certainly calm down.

Rising stocks are not a real indication that the economy is doing well. Rising markets do not usually benefit the 'Average Joe' on the street.

Bitcoin has risen in the last year from $7000 to $50,000. Cryptocurrencies like bitcoin are worth what people believe they are worth.

Individual investors, as opposed to large buying syndicates, traditionally jump into a rising market and lose as stocks descend. It is said that 80% of day traders lose money. I read that this is the first time in American history that a person of 30 is not doing as well as their parents did at the same age. Younger investors must be feeling the pressure.

In the case of GameStop, media savvy novice investors, using disruptive commission free trading platforms, managed to drive a relatively unknown stock up by 1,635%. Needless to say, many investors bought GameStop as it skyrocketed and now face deep losses. The GameStop event left speculators questioning what anything is really worth today.

This type of stock market disruption could affect the spending habits of novice investors!

Investment platforms are dabbling in diamond futures and cryptocurrencies. Idex is currently supplying the data and logistics behind a diamond backed cryptocurrency. There is certainly a place in the market for trading diamond mining stocks. They demonstrate their worth in profit and loss statements. However, there is a difference between evaluating an individual diamond portfolio and evaluating a mining company.

Diamond investment schemes send mixed and confusing messages to diamond consumers. These schemes are based in the belief that diamonds can be priced and traded just like a stock. They incorrectly imply that multitudes of diamonds can be evaluated to an exact monetary value and traded transparently. Stock investors scrutinize their investments very carefully, especially if they have been burned. A bit of study will conclude that diamond investment schemes have come and gone and left naÔve investors holding the bag.

Luxury is luxury and stocks are stocks . they are different. Luxury is primarily an emotional investment and stocks are strictly a monetary investment. The major component underpinning diamond value is the fact that every diamond is unique. Confusion arises, at the jewellery retail level, when clients believe that the monetary value of a diamond can be realized by applying a simple formula to arrive at a verifiably reliable value.

The emotional and monetary value of a diamond is undercut when individual diamonds with complex differences are commoditized and represented as consistent and uniform.

Mel Moss