April 4th, 2012
Original Source: CNBC
By: Ansuya Harjani / Assistant Producer, CNBC Asia


Diamonds Are a Great Way to Diversify: Expert  

Diamonds are an attractive option for investors looking to diversify portfolios because they don't move in relation with other assets such as commodities and stocks, according to David Riedel, President of equity research firm Riedel Research Group.

"Over the past decade cross-asset correlations have nearly doubled, (but) diamonds have exhibited very low correlations to other assets making them an attractive source of diversification. They have almost no correlation to anything else – commodities, gold, equity markets," Riedel told CNBC on Wednesday.

In 2011, the RapNet Diamond Index (RAPI) for one carat polished diamonds rose 19 percent outpacing gold which rose 10 percent. And supply constraints are expected to take diamond prices even higher in the coming years, says Riedel.

He estimates demand for diamonds will grow 50 percent between now and 2015.

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