Diamonds prove to be an asset manager's best investment friend

Jotika, who manages more than a Bt100 billion of other people's assets, has made the "women's best friend" her best investment tool.

"My grandmother and our family often took me to diamond shops. So, I saw them buying diamonds since I was a kid. The first diamond ring I bought was during my studies at Sasin [Graduate Institute of Business Administration of Chulalongkorn University]," she said.

Jotika seemed happy talking about how to classify diamonds according to their grade, colour, karats and flaws.

She suggests investing in diamonds with certificates, which will make trading in them more liquid, as many have questioned diamond collecting as a good investment channel because of its lack of liquidity.

She bought her first diamond ring from a friend when she studied at Sasin and start earning a monthly salary of Bt6,000.

"At first, I bought diamonds because of their sparkle as an ornament like other women who love the beauty of them. I didn't think about buying diamonds for investment at the time. But after I got married, I began thinking about buying diamonds for investment," she said.

And from that time on, she started studying seriously about the diamond industry.

She feels that diamonds have an intrinsic value besides their use for ornaments. With market demand, diamonds can have added value.

The general perception about diamonds is that their prices fall after purchase, but Jotika disagrees with this.

Diamonds, she guarantees, can generate higher returns than investment in other assets.

Buying small, genuine diamonds isn't any different from buying fake diamonds in terms of admiring their beauty, she said. Choosing a genuine diamond for Bt6,000, goodgrade fake diamond for Bt600 or lowgrade fake diamond for Bt300, most people can't tell the difference. Besides, a small diamond, despite its genuineness, is difficult to sell.

But when it comes to investing in diamonds, what must be considered is whether there is value added and enough liquidity to sell them, she said.

Starting with certificates for diamond investment as the prime principle, making an investment in diamonds a performing one depends largely on selecting stones on their grade, colour, type and flaws.

Though diamond prices rise every year, the key factor is liquidity.

"Liquidity is the key. I've learned that many join auctions via the diamond market of South Bay Auctions. The purchase price depends on the market price plus the fee. The diamonds that are eligible to trade on this market must have certificates," she said.

Her longterm connections with diamond shops in the "Baan Mo" area helped her start trading diamonds via South Bay Auctions, which was the first time she started investing in the gemstone.

She has spent altogether Bt10 million on her diamond collection but its value has risen significantly over time. She declined to say how much her diamonds were worth at present, just that she would sell them only in time of need. However, diamonds are only part of her asset portfolio besides savings for the education of her two daughters.

A long-term equity fund and retirement mutual fund are also there in her portfolio for tax savings.

And TMB Asset Managemen's CEO sets aside some money for travelling as a reward for herself each year.

"When we invest in several things, we must consider liquidity. The mutual funds under our management do not have a liquidity problem as investors can redeem them at anytime," she said.