In this current economic climate, you would be forgiven for thinking that there is no real way for you to make a return on your hard earned cash via investments. Banks offer pitiful interest rates and shares, bonds and stocks are notoriously risky because of their ever changing nature.

However, do not despair. There is evidence that investing in valuable items and collectibles does give you a significant return on your money in the long-term.

Diamonds are often said to be one market which are guaranteed to increase in value in real terms, but there was never any sure way of knowing this - until now that is.

Luc Renneboog and Christophe Spaenjers, of Tilburg University in The Netherlands, were granted access to Rocks International's database of 4,000 gem auctions, and published a paper titled Hard Assets: The Returns of Hard Diamonds and Gems.

Diamonds were shown to increase significantly in value by the study

Their study showed that, during the course of the last 10 years, 'white' diamonds have significantly increased in value, second only to the massive rise in the value of gold. In fact, diamonds were even more valuable than gold for a period in the first half of 2008.

The precious stones outperformed bonds and stocks consistently over the course of the study. If you had invested in stocks, there is a good chance you have seen virtually no increase in the value of your assets.

Of course, there is still risk with any investment, as market fluctuations occur daily, not yearly, so digression is always advised. But, even so, there is little question that someone who bought a diamond ring in 1999 would have seen its value rise by as much as 100% by the time 2011 came around.

The value of diamonds is undisputed, and with growing markets for them in developing Asian countries, their worth is only likely to increase even more, making them canny investments. So the next time you walk past a jewellery store on your way to the bank, you may want to reconsider what you do with your money.

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