A DIAMOND share, also known as DIA, is a kind of unit investment trust or UIT.
For such shares, the Dow Jones Industrial Average serves as the underlying asset. It is therefore index-based. Shares of this trust are purchased or traded on the American Stock Exchange.
As a UIT, a DIAMOND share has an expiration date. DIAMOND shares are attractive for investors because they depend on the performance of the index. A share is typically priced at a hundredth of the DJIA value.
In the context of investment, however, diamond may also refer to the gemstone. Diamonds are used for the production of jewelry. However, a bigger percentage of mined diamonds is used for industrial purposes. Mining equipment and surgical tools are some examples.
The De Beers group is known for having the largest market share of rough diamonds worldwide. As such, it has been able to control pricing.
Investors may choose to place their money on diamonds because they continue to work well even during periods of inflation. Graded and certified diamonds are more valuable.
However, with the development of synthetic diamonds, the value of natural polished diamonds is threatened. At the same time, diamonds are not as liquid and fungible as other investment vehicles. It may therefore be advisable for prospective investors to think twice about turning to diamonds as a long-term investment.
