Diamonds: Still the most sought after gem

Centuries ago, diamonds were associated with the lives of nobles. It was because of diamonds worth 1.6 million livres that French aristocrats such as Louis XV, Madame du Barry, Louis XVI, Contesse de la Motte and Marie-Antoinette squabbled among themselves, with some of their quarrels leading to trial and prison.

Diamonds, the most durable of gems, resistant to scratches and heat, symbolize not only wealth but also beauty and power. The world's most famous diamond, the Kohinoor, discovered in the time of India's Mogul dynasty, became a coveted treasure due to the belief that the owner could reign over the globe, causing people to risk their life to possess the precious stone.

In the 21st century, diamonds have continued to be a symbol of one's social status. But the difference today is that diamonds are not simply owned by nobility or the upper class, but also serve as an accessory of celebrities. Famous actresses Audrey Hepburn, Cindy Crawford, Sharon Stone, Elizabeth Taylor and Sandra Bullock, to mention but a few, are among those well-known personalities who take great delight in wearing the precious gem.

As an investment, the elderly who were unfamiliar with banks used to favor gold. Gold ingots and ornaments were regarded as one of the safest forms of investment. They were easily saleable and the price of gold never plummets.

"The price of gold differs by about 1 percent to 3 percent at the maximum," said Welly, the third generation of a family who runs the Logam Tunggal gold shop, which also deals in diamonds.

"The price of diamonds can slide to a level 10 percent to 30 percent lower, except for certified diamonds, whose value declines only by 1 percent to 3 percent. At worst, diamonds' resale value still stands at 70 percent," he added.

Lately, however, there has been a shift in the investment pattern of society. "Besides deposits, those possessing enough money have started eying diamonds as an investment alternative," said Welly.

In his view, gold can be simply kept but diamonds offer more benefits. They can be stored, sold or worn as accessories.

In order to retain the value of diamonds, Welly, who is continuing the fifty-year-old family business, suggested that buyers should pay considerable attention to the quality of diamonds they purchase. "It involves the four C's -- cutting, color, clarity and carat. Though the price may be the same, quality is something else," he pointed out.

The diamond business, despite the resale value it retains, differs vastly from other dealings, such as real estate or electronic sales and purchase. It's a business of confidence.

By advertising, car manufacturers can sell their products, because would-be buyers are generally informed of the brand and shape of the product they want to purchase.

"That's not the case with diamonds. Customers have to examine them directly. They should be given the opportunity to check the design, size and quality, so we've got to have stock," Welly said.

Certain times of the year will prompt people to buy diamonds, such as the wedding season.

"It's the months leading up to this season that diamonds are most sought after," Welly said.

Diamond dealers are optimistic about their business prospects, notwithstanding the uncertain rupiah rate. Those who are fond of diamonds include teenagers rather than just long-time customers with healthy bank accounts. The models teenagers choose are simple, with the emphasis on the diamond rather than the gold setting.

The other trend bringing relief to diamond dealers is the emergence of a new market segment, that is, male buyers of diamonds instead of only women.

"Men buy diamonds mostly as gifts that they give to loved ones," Welly said. --Santi Hendrawati