When most of us think of diamonds we are reminded of all the catch phrases ingrained in our minds - 'diamonds are forever' and 'diamonds are a girl's best friend'. For most of us, a diamond symbolizes beauty and romance – if need be, we can sell it in a pinch, (Pictured right: Marilyn Monroe, the most famous lover of diamonds).

But with the recent jump in the price of diamonds, some people have started to consider trading in diamonds, hoping to increase their wealth by reselling at a later date. But remember, a diamond pays no interest or dividend, so the only money to be made is on the final sale of the item.

Historically, diamond prices have not fallen in decades, and this is what gives gems the appearance of being a good investment. However, while diamond prices never drop out of site, the rate of price increase is questionable. If your money was invested somewhere else, could you earn a steeper price increase? The answer is usually yes.

If you purchase a diamond without having it appraised by a respected gemological institute, you run the risk of dispute when the time comes to sell your gem. Discrepancies between colour, cut, or clarity could affect the price tag of your stone by as much as several thousand dollars. Having a certified diamond by a well-respected and established gemological authority will reduce the risk of such disputes, but is not full proof.

Perhaps the most important risk to understand when contemplating investment in diamonds is the absence of liquidity – the inability to sell a diamond at will. Not only will you find it difficult to find a jeweller willing to buy a strange stone off the street, but you must also take under consideration the retail wholesale spread. Unless you have an established history with a diamond dealer, chances are you will be paying premium dollar for your new gem - at or near retail price. However, when attempting to sell your stone, you will find that most jewellers would only be willing to pay wholesale prices or below. You have to remember, why would they take a chance on you when they have a supplier who will lend them stones out on memo, which they can return without charge if they so choose?

Historically gold, diamonds, and jewellery were a wise investment in the event of a market crash or sudden crisis when money became worthless. In some parts of the world where currencies are unpredictable and unrest runs rife, these commodities may be the only way to move your wealth beyond borders - gems are valued everywhere. In these cases, you rarely make back what you spent on the item when originally purchased.

As a means to increase your personal wealth, diamonds are rarely ever your best option. Instead, they will continue to be purchased and appreciated for their inherent beauty and glamour.