The New Alternative Asset
In early February, I reported on the continued slow death of cash in America … and even around the globe.
As consumers, we find ourselves relying more on digital forms of cash through credit cards, apps and even cryptocurrencies such as bitcoin.
But keeping our wealth locked up in digital form puts it more in the control of banks and the government. The trail left by our wealth is easier to follow, putting a crimp on our privacy, and it’s far easier to confiscate — say in the form of a bank holiday à la Cyprus or Greece.
But what if you could store your wealth in a hard asset that not only offers strong price growth, but easy portability that you just can’t get with a bar of gold?
Diamonds have been greatly overlooked as a way to store your wealth and keep it highly portable. For decades, De Beers sold us on the idea that diamonds are a measurement of love and commitment. But beyond engagement rings and the celebration of milestones in life, diamonds continue to be a great store of wealth, much like gold.
That’s why I’m so grateful that Joseph Lipton, CEO of Secured Worldwide LLC, had agreed to an interview today.
Jocelynn: Joseph, thank you so much for joining me. Do you think there’s a rising urgency among investors when it comes to protecting their wealth?
Joseph: Definitely yes. As governments and central banks pursue questionable policies and politicians reach further into the lives of their citizens, confidence is being eroded. Central banks printing money to buy debt, currency manipulations, government misrepresentations, reactive equity markets, historic income disparity and surprise election results have combined to raise alarms.
India’s recent clampdown on cash banknotes demonstrates that countries will aggressively regulate currency, eliminate cash and pass laws that impact savings when the new political elite establish new priorities.
Yet these new politics, laws, taxes and manipulations have not reduced ballooning deficits, and debt-to-GDP ratios are still growing. If global deflation continues its downward trend, governments’ control of wealth and money will grow.
Jocelynn: Even with these worries, stocks have proven to be the place to be. The S&P 500 rallied 9.5% in 2016 and is up more than 200% since putting in a bottom in 2009. Are investors still moving into hard assets?
Joseph: Yes again. The move of wealth and savings from its traditional medium of exchange to other stores of value — including time-honored hard and alternative assets such as precious metals, real estate and high-end collectibles — makes sense. Alternative assets have remained secure against traditional risks and throughout history have provided protection against inflation, interest rates, and currency and country issues.
In the traditional global system, precious metals, real estate and high-end collectibles such as art are the leading alternatives, both in the individual’s safety-deposit box and portfolio, or the investor’s allocation model. And with financialization of these assets over the last 20 years coupled with the explosion of global liquidity, values have reliably risen as new demand surged.
Jocelynn: In the past, I have discussed gold, rare coins, stamps and even real estate as avenues for not only protecting your wealth, but also as a way to quietly store your wealth. But you’ve got another alternative asset that many investors simply aren’t considering.
Joseph: Diamonds are a portable, alternative store of savings and wealth that are being increasingly utilized for diversification. And in a new and uncertain world, where surprises will continue to catch us off-guard, portability should absolutely be understood as diversification. The ability to easily move savings and wealth is not a feature of precious metals, real estate or most collectibles, but it is for diamonds.
They are arguably the densest and most portable form of savings and wealth in existence. Real estate is fixed, and $1 million worth of gold weighs about 10 kilos — as much as a large car tire — but a handful of collection-quality diamonds can be worth many millions and fit in a pocket.
Jocelynn: Portability is definitely a boon in this day and age, but what about the pricing of diamonds? Are they hit with wild swings in volatility or crazy shifts in demand?
Joseph: Over the longer term, diamonds clearly demonstrate lower price volatility, overall price growth and a lack of price correlation with more traditional alternative assets.
A recent report by Barclays found that, in the current low-interest-rate environment, investors’ interest in diamonds continues to grow. Illustrating a classical supply/demand scenario, Bain & Company continues to forecast that demand for diamonds will outstrip supply by 2020 and the market for investment diamonds will play an increasingly influential role in all diamond prices.
And when emerging economies accelerate growth, diamond usage will grow as well. Add diamond financialization by Russian mining giant Alrosa, South African giant De Beers, a diamond exchange in Singapore, and future exchanges in Dubai, London and China, and the use of diamonds as a growing financial store of savings and wealth is obvious.
Jocelynn: How would investors wisely add diamonds to their portfolio? I’m assuming they shouldn’t just head down to their local jeweler.
Joseph: VULT is a world-changing innovation designed for buying and selling diamonds, gifting diamonds and preserving wealth. In an uncertain world, VULT may provide breakthrough security for you and your family’s financial future. Through technology, VULT has transformed diamonds (of opaque, uncertain value) into a transparent, equitable investment opportunity.
VULT provides diamond collections that are standardized, understandable and fungible. Each VULT case holds only GIA-graded, ethically sourced natural diamonds. Each diamond weighing between 0.5 to 2.6 carats is guaranteed to be in the D to F color grade and is identifiable by the laser-engraved GIA certificate number on its girdle. All diamonds are in the Flawless to VS1 clarity range, and cut quality is graded Triple Excellent.
Utilizing patented and proprietary materials and an open and transparent web-based portal, VULT allows anyone with Internet access to determine the last traded or listed price for any model instantly and globally. With embedded technology that permits easy authentication, VULT delivers a fully warrantied, understandable, portable and secure diamond asset that can be used by counterparties independently.
VULT is American-designed, engineered and manufactured to exacting standards. VULT makes a completely original legacy gift with exceptional value. It is fully warrantied, physically secure, easily authenticated and not regulated or tracked.
Jocelynn: How can our readers find out more about investing in diamonds and VULT?
Joseph: Investors interested in expanding their portfolio to include diamonds can go to www.vult.com to learn more about VULT and how it leads the portable asset revolution.
VULT is available in an understandable range of denominations from $25,000 to $250,000 and built with higher diamond standards than any other financialized asset. It is a truly unique product that combines the best qualities of alternative assets and diamonds with transparency and simplicity.
We can also be reached at:
Secured Worldwide LLC
50 West 47th, Suite 910
New York, NY 10036
Secured Worldwide Limited
Unit 3308, The Center
99 Queen’s Road Central
With increasing uncertainties, VULT resolves a best-in-class path for diamonds as the smartest portable alternative asset.
Sr. Managing Editor, Sovereign Investor Daily