“Diamonds are a girl’s best friend.” From Carol Channing to
Marilyn Monroe to "Moulin Rouge" the iconic song has endured as a
symbol of wealth for more than half a century, according to CNBC.
But should diamonds be an investor’s new BFF? Of course, investors and couples alike can
buy diamonds on the retail market, but there’s a movement to create a way for
individual investors to buy diamonds like gold.
The Securities and Exchange Commission is looking over a
proposal for the first-ever diamond-backed exchange-traded fund . Tom
Lydon, president of Global Trends Investments and editor of ETF Trends, thinks
there would be a demand for a diamond ETF, but the problem will be pricing.
“When you look at these ETF providers trying to get into the space to a degree
it’s the tail wagging the dog. They’re trying to force the industry to have
standardized pricing” he said.
The diamond industry likes “the fact that pricing is not
always clear. That’s basically how they make their money,” Lydon told CNBC’s
Street Signs. “Gold is liquid. It trades
on the futures market. But when you get to diamonds it’s a whole different
story. Diamonds aren’t created equal. There are so many sizes, shapes,
qualities….”
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