A mobile tangible asset is always far more attractive and far more stable than an immobile tangible asset. If we compare different tangible assets during the recent economic crisis in Southeast Asia, a very clear picture emerges: many investment properties in Bangkok fell to only around 10% of their former value within six months, while diamonds, gemstones, and gold increased by 100% in the local currency and remained stable when measured in international currency.

Even during the German economic crisis of recent years, real estate values declined significantly, while diamonds increased in value over the same period. In general, it can be said that in times of crisis real estate is always under strong pressure, whereas movable assets are particularly in demand. Due to their mobility, mobile tangible assets always operate at an international level, while real estate is bound to a local level.

For this reason, in local crises mobile tangible assets are the most sought-after assets, as they both enable a shift to the international level—thereby even circumventing a devaluation of the national currency—and allow the typical flight into tangible assets that occurs in times of crisis.

Diamonds are generally a tax-neutral form of investment. They do not incur capital gains tax and are otherwise only subject to taxation if the owner explicitly wishes this.

There is no real “residual risk” associated with diamonds. With every currency, every commodity, every property, every share, or every government bond, a certain residual risk exists. A world war could theoretically devalue any currency, render any property worthless; a new technology could theoretically replace any raw material overnight; a powerful competitor could cause any company and its shares to collapse overnight. With diamonds, however, no war, no new technology, and no fashion trend can fundamentally alter their price. The potential sources of diamond raw materials are reasonably well known, and throughout history diamonds will become increasingly scarce—just like any other raw material (oil, iron, coal, etc.).

The diamond—together with high-quality art—is one of the few assets that combine practical use with value preservation. A diamond can be worn as jewelry while simultaneously serving as an investment.

Diamonds are particularly well suited as mobile tangible assets because, among all tangible assets, they offer by far the greatest advantages.

Why invest in diamonds?

Diamonds in general

Protection against inflation, bank failures, stock market crashes, and currency reforms
Anonymity (no registration of the investor, no direct state access)
Worldwide convertibility, since diamonds—as the only internationally recognized substitute currency—are valued consistently in all countries of the world (see the 4Cs)
A constantly available substitute currency
Tax-free appreciation in value
Tangible asset investment without maintenance costs
Your personal monument of success with the highest possible prestige value

The greatest crises of our time

Current events:

Financial crisis
Real estate bubble
Expansion of the money supply (inflation)
Migration flows
Internal unrest (G20 summit, Hamburg)
Terrorist attacks

The financial crisis is omnipresent. We have even witnessed banking crises and liquidity problems at many very large banks in various European countries. This occurred in England, Cyprus, Greece, Portugal, and Ireland, where the population was temporarily unable to withdraw their bank deposits, or—as in Cyprus—was limited to withdrawals of only 250 euros per week.

The real estate bubble is real. Financing conditions are cheaper than ever before; this is due to the expansion of the money supply, which acts as an accelerant for an inflationary economy. The situation becomes even more severe when interest rates rise again. In that case, many people will lose their property, because due to the ten-year fixed-interest period in most contracts, the interest rate is reset after ten years. This results in a significantly higher repayment burden for borrowers. Even if the monthly installment remains affordable, it is possible that the collateral property no longer provides sufficient loan security, requiring additional capital to be pledged. This occurred in 2000 and 2001 in Germany (commercial real estate), in 2008 and 2009 in the United States, and even countries such as Thailand, Japan, and the United Arab Emirates were not spared. As a result, a large number of properties will enter the market while demand declines. From a long-term perspective, a significant loss in value must be expected.

Internal unrest can occur in any country, as we unfortunately witnessed in Hamburg. Hardly any country is immune to international terrorism.

If you own real estate as a tangible asset, the greatest problem is its immobility. In times of war, terrorism, and internal unrest, more and more properties are damaged. Insurance companies are not obliged to compensate for such damages, as every policy contains clauses excluding coverage for war-like conditions.

What can we learn from crises?

We are currently experiencing strong migration flows from various countries. However, due to immobility, no one brings their houses with them—nor 20 kilograms of precious metals.

Therefore, a tangible asset must be mobile, inflation-protected, indestructible, and valuable. These characteristics are possessed only by diamonds.