The rock i.e. diamonds have always been considered a girl’s best friend (and I can certainly vouch for that from my experiences). From Marilyn Monroe to Moulin Rouge, the iconic song, “Diamonds are a girl’s best friend”, has endured as a symbol of wealth and supremacy for centuries. But the million dollar question that investors repeatedly ask is- Should diamonds be an investor’s new investment alternative?

Yes, my dear readers would be thinking of buying diamonds on the retail markets but there is a movement to create a way for individual investors to buy diamonds like any other commodity. The Securities and Exchange Commission (US) is looking for a proposal for the first ever diamond backed exchange traded fund. However, the strategists think there would be a demand for a diamond, but a certain dilemma could be caused in fixing the prices. Some concerned authorities have even opposed the notion by stating that by establishing a Diamond ETF, they’re trying to force the industry to have standardized pricing.

The diamond industry supports the fact that the pricing is not always clear. This is the basic reason how they make money. Unlike gold which is liquid and traded on the futures market, the story of diamonds is different altogether. Diamonds aren’t created equal since there are extracted in different shapes, sizes and qualities.

Wall Street moved into the diamond trading in the late 1970s and early 1980s, when inflation was exploding and investors were looking for hard assets. But when rates sank, so did the value of diamonds and the diamonds as an investment proposition.

Another interesting research article explains that the end-users for diamonds tend to be 98% as opposed to gold’s 50%. So there could be lot of volatility on those supply and demand characteristics.

Well, the notion carried forward by the SEC to form a diamond ETF, has seen divided opinions on the relevancy and the mechanism of it. However, a day could not be far when before proposing to your spouse, you might want to check the prices of diamonds in the futures market and then fix a date for the actual proposal. Sounds weird but it could be a reality check in the days to come!