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How to buy / invest in diamonds through SIP

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Now , you can invest in Diamonds  by investing small amount through SIP option. Like mutual funds and gold funds, you can now buy diamonds in SIP format through ICEX. Indian Commodity Exchange (ICEX) is the world’s first diamond trading exchange.

Key Features:

  • The ICEX is starting trading in diamond contracts of three different sizes -30 cents, 50 cents and 100 cents (1 carat). The diamond is of HVS2 quality, which is one of the largest-traded quality of diamonds. HVS2 quality, which is one of the largest-traded quality of diamonds. Also, the diamond that investors will receive will be DeBeers certified.
  • You can invest in SIP mode for certain period and take delivery of diamond at the end of term.

How to Invest in diamonds at ICEX

  • You need to open an account with broker on the ICEX
  • Complete the KYC process (ID & address proof) and deposit money
  • Select the date of month on which diamond will be bought in the electronic format.

Minimum amount of Investment

  • The SIP amount will vary according to diamond price. As per the current price of 30 cents diamond (Rs 27000), each cent will cost Rs 900 and you need to invest till 30 months to accumulate 30 cents.
  • It means, you need to invest and accumulate at least 30 cents to take the delivery.
  • There is no penalty if you do not pay SIP amount in particular month.  The balance of diamond unit will remain the same.
  • You can also sell the diamond units (available in DMAT) at any time.

Future Prospects and Returns

  • At ICEX, the trading is done at the wholesale prices that is almost 30% lower  than the retail prices.
  • It is advisable that retail investors should look this as an opportunity to buy diamonds for consumption rather than investment. For investment, it should be no more than 1-2% of total portfolio.
  • In the past three years, returns from diamonds have been negative. On a five-year basis, the prices are flat :

If you have any queries related to this article or any other personal finance query ( Investment, Taxation etc), please comment below

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The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

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