Could diamonds actually be a good investment?

London (FOX19/CNN) - Jewelry sellers have a new pitch: Buy our diamonds as an investment! At the International Jewelry Fair in London, one designer said diamonds are increasing in value at a rate of six or seven percent a year.

But it can be difficult to price them. They aren't traded on commodity exchanges like gold or silver. Prices can vary widely based on size, quality, and color.

"The key point about colored diamonds is their rarity," said Mahyar Makhzani of the Sciens Diamond Management Fund. "The price of colored diamonds has not gone down in the last 50-odd years. You have to remember, every diamond that's ever been mined still exists. They don't melt away."

Still, as many Americans have learned when trying to sell deceased relatives' belongings, getting a diamond appraised at a certain price is one thing. Getting someone to buy it at that price is a steeper challenge.

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