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Diamond risk assessment: advantages and disadvantages

Diamonds offer protection against inflation, bank failures, stock market crashes and currency reforms. Not only that, but anonymity plays a big role for many investors. There is no investor registration for diamonds, no government access. Diamonds are not only anonymous for buyers, they also offer the unbeatable advantage that they are worldwide, easily convertible.

Did you know? Diamonds are the only internationally recognized substitute currency that is valued the same in all countries.

Cartier jewellery (even the finest particles are used):

Why are diamonds so popular?

There are exclusive jewellery dealers and producers like Graff, Phillips but also De Beers. Nothing happens by chance, much of our life is subject to external influences. Here Alex Fischer gives many good examples. For example, the diamond ring, for the sweetheart.

De Beers is known worldwide for producing the finest engagement rings, wedding bands and other elegant diamond jewelry. In the 1960s, De Beers and its marketing team asked themselves, “How can we sell more diamonds? The idea, a marketing campaign that said, “If you’re a stickler and you really love your wife, give her a diamond ring.”

The campaign worked extremely well, so well that there was even a second edition: “Anyone who really thinks something of himself invests at least a month’s wages for his mistress.” This second campaign also worked extremely well. So De Beers went one step further: “If you really love your wife, you should invest 2-3 months’ salary!”

Since then, diamonds have arrived in society and are a part of pretty much every couple. This drove and still drives the value of diamonds even higher since then.

How is the value determined?

Every diamond is unique. They can be the same size, yet have extremely different values. The quality is measured by the 4C of the diamonds. This means that differences are formulated by “Carat, Color, Clarity and Cut”. They determine the quality and value of the diamond. Once you decide to actually buy diamonds, the tax-free appreciation also plays into it (check out our appreciation statistics later). The tangible asset with no maintenance costs is free of maintenance costs as long as safekeeping is solved.

Tip. Diamonds are excellent as part of your own portfolio. As we have described in the editorial Capital Investment XXL, a good portfolio should consist of one third each of fixed-income investments or securities, real estate and mobile assets, such as art, designer fashion or diamonds.

The advantages of diamonds as an investment:

• Protection (inflation, bank failures, stock market crashes and currency reforms)
• Anonymity of the buyer
• Worldwide convertibility
• Constantly available substitute currency
• Tax-free appreciation
• Investment in tangible assets without maintenance costs
• Prestige

Valuation & Diamond Certificate

When buying diamonds, you should always make sure that the investment diamonds have a certificate issued by a reputable and world-renowned institute:

Valuation

The performance potential of diamonds as an investment is generally influenced by the “4 Cs”.

Source: Wallstreet Online

The famous 4 Cs:

• Cut – the brilliant cut with 57 facets is considered the most beautiful.
• Carat – the heavier or larger, the better
• Clarity (purity) – the fewer inclusions, the purer
• Color – the rarer, the more expensive

Since the development of these four guideposts and criteria for the selection of diamonds as an investment, a fifth C has now also become established:

• Conflict – the more notorious, the more dangerous.

Statistics: Diamond production until 2020

Development and forecast of global diamond production from 2005 to 2020 (in millions of carats).

Source: Statista

Synthetic diamonds: Produced in the laboratory

Diamonds can be produced artificially by recreating the natural conditions of diamond formation as accurately as possible. The so-called synthesis requires extreme temperatures of 1,500 to 3,000 degrees Celsius and a pressure generation of approximately 55 to 60 kilobars. For comparison, your environment usually has around 1 bar. So diamonds need 60,000 times more pressure to form.

Temperature: 1,500 to 3,000 degrees

Pressure: 55 to 60 kilobar

The first synthetic diamond

Source: Alex Fischer Diamond as an investment

The first successful synthesis took place in the 1950s, but shortly after the turn of the millennium, diamonds could also be grown from the air for the first time with the help of a photon plasmatron. Initially, it was only possible to grow small diamonds due to the high costs involved. Thanks to today’s technology, however, it is now also possible to produce large diamonds in this way for little money.

Milestones:

• 1797: The scientific breakthrough
• 1926: Parson uncovers scientific error
• 1941: New experiments and first successes
• 1953: The first synthetic diamond

In Stockholm, the scientists of Allmänna Svenska Elektriska Aktiebolaget, or ASEA for short, independent of Hall and General Electronic Company, were also successful and were able to present their first synthetic diamond on February 16, 1953, after about four years of work. However, this achievement was not published until the 1980s.

The Korean company Iljin Diamonds entered the industrial market of diamond synthetics in 1988 thanks to a Korean employee who had formerly worked at GE and shared their trade secrets with Iljin Diamond and numerous Chinese companies.

Diamonds are considered the most precious stones in the world and have occupied mankind since their first discoveries far in the past. But although scientifically and historically a lot of information about diamonds has been brought to light, outside of connoisseur and enthusiast circles, few know anything about the formation and history of these precious stones. From the original from the earth to the synthetic diamond – here you will learn everything!

Diamond: Name Origin, Meaning & Synonyms

Diamonds as an investment, that is an extensive topic. First of all, at the beginning are asked pretty basic questions, questions like:

• What is the difference between brilliant and diamond?
• What is the cost of 1 carat diamond?
• How and where are diamonds created?
• What is a carat diamond?

Let’s get started! Diamonds as an investment, first the definition: The diamond carries numerous synonyms, even if most of them are ancient and rather unknown in today’s usage. The term has its origin in the Greek ἀδάμας – adámas – which means “indomitable” and refers to the hardness of this stone. Furthermore, the following terms are known:

• Adamant
• Adamas
• Anachites
• Diamas
• Ira’s
• Itam

Lyrically, the designation of the diamond as the “moon of the mountains” finds particular appeal. The smallest visible diamonds are called “grains of salt”, whereas precious stones with a color gradient from blue-white to yellow are known as “prernier”. Furthermore, there are special names for base diamonds, which are opaque in their transparency:

• Ballas
• Bort
• Carbonado

But diamonds are also subdivided in cut form. According to their cut form, a distinction is made between brilliant, diamond, pointed stone and table stone.

Mineralogy: The element diamond

From a purely scientific point of view, a diamond is the interaction of its properties. Important factors are, for example, the Mohs hardness – a relative hardness value used for minerals and named after the German mineralogist Friedrich Mohs -, the luminescence – the glowing of a substance at unchanged temperature – and opacity, i.e. light transmission, as well as its tenacity – the behaviour of minerals when scratched and bent. Incidentally, diamond is the record holder as the best known thermally conductive mineral in the world.

Classification, Structure & Crystallography

• Mineral Class: Elements
• Element: Carbon
• Chemical formula: C
• Mass: 100%
• Atoms: 1
• Atomic mass (u): 12.0107800
• Crystal system: cubic
• Common crystal faces: {111}

Physical properties

• Mohs hardness: 10.0
• Density (g/cm³): 3.515
• Fissility: {111} perfect
• Fracture: conchoidal
• Tenacity: brittle
• Colour: colourless, various foreign colours
• Line colour: white
• Opacity: transparent to partially transparent to translucent
• Gloss: Diamond gloss, grease gloss

Chemical behaviour:

• Graphite is formed when heated in the absence of air
• At high temperatures reactions with hydrogen, oxygen and fluorine
• Easily soluble in molten carbon-soluble metals

Other features

• Melting point (at degrees Celsius): 3,500
• Thermal conductivity (W/(m – K)): 1,000-2,500
• Luminescence: fluorescent
• Radioactivity: none
• Compression modulus (GPa): 442
• Unstable: Acids and alkalis

Raw stones: Direct from the mine

Colour variety due to additives & defects

Although the “real” diamond is colorless in its natural state, there is quite a variety of colors in the diamonds found so far. Various additional elements that can influence the growth of a diamond, for example nitrogen, sometimes result in many different shades of colour. Nitrogen produces a yellow hue, while the addition of boron produces a bluish hue. In general, all shades of yellow, gray, green, and brown, as well as color changes within a stone, are dominant and therefore most common. The diamonds with pure and intense colors are therefore considered particularly beautiful and especially rare. In English these color diamonds are called “Fancy Diamonds” or short: Fancys and it is distinguished between seven Fancys:

• Canary yellow & orange (addition of nitrogen)- famous example: the Tiffany
• Brown (defects in the crystal lattice) – famous examples: the Lesotho & the Earth Star
• Blue (addition of boron) – famous example: the Hope diamond
• Green (radiation defects) – famous example: the Dresden diamond
• Red (crystal defects) – famous examples: the Red Shield & the Red Diamond
• Pink/Pink (crystal impurities) – famous examples: the Daya-I-Noor & the Steinmetz Pink

In addition, there are countless color variations, for example, also gold, up to black. Structural features and irregularities within the structure of a stone can also cause color changes, in technical language these are also called “Grainings”. These can occur as lines, angles and curves in the crystal, but the most common are very fine lines about a few hundredths of a millimetre thick and brownish in colour. Due to special light refractions, it sometimes happens that the diamond takes on a pink color.

The biggest diamond mine in the world

Statistics: Diamond production until 2020

You can find more statistics at Statista

Diamond cut: 21 types

Diamonds are known to have the unique ability to refract light in such a way that they sparkle intensely, from all angles. When it comes to the cut of diamonds, there are different shapes. These include round cut (also known as brilliant cut), heart, oval, marquise, radiant, princess and many more. The cut quality determines the value of a diamond significantly. When determining value, it’s all about how well a diamond’s facets interact with light.

• Diamond cut (external)

The history of diamonds: from India to the world

The first confirmed discovery of a diamond is traced back to India and is estimated to have occurred around 4,000 BC. In the ancient writings and temples of India, there are repeated references to diamonds, their findings and their use. It is said that the priests of the time carried shields made of gold, each with a diamond embedded in the middle. On the basis of drawings and replicas, however, the size of this shield jewellery suggests, according to present-day knowledge, rather rock crystals. However, India is undoubtedly the origin of the diamonds. It is assumed that Phoenician ships brought the Indian diamonds to the wide world in the second century before Christ. The most beautiful, largest and most magnificent of all stones, however, remained for a long time in the possession of the local princes and adorned their treasuries. It was not until the beginning of the 18th century that the occurrence of diamonds in India slowly declined.

The first reported discovery of a diamond, on the other hand, came from Indonesia. In the 6th century AD, some diamonds were found there, but overall the yield was small and the transport was rather complex under the conditions of the time, which is why the stones were dismissed as insignificant.

Diamond rush in South America and South Africa

In South America, which was under Spanish and Portuguese rule in the 17th and 18th centuries AD, prospectors stumbled upon diamonds in the Amazon region of what would later become Brazil, just a few decades after the diamond deposits in India had subsided. Once knowledge of diamonds spread, countless adventures traveled to South America in search of wealth. For over 100 years, South America supplied the world with diamonds. Nowadays, Brazil still supplies diamonds to the world, but nowhere near as many as in the days of the so-called “diamond smoke”.

Around 1970, a new diamond deposit was discovered in South Africa and, after an initial frenzy, was brought under control in terms of mining and trade. In the first years after the turn of the millennium, further deposits were found in Africa, including Angola, Tanzania, West Africa, Zaire and Central Africa.

Other occurrences & the oldest Dimanant in the world

Diamonds were first mined in Russia in the 1950s. Furthermore, at this time there were diamond discoveries in Australia, Borneo, Guyana and Venezuela.

Australia made history in 2007 as the place where the world’s oldest diamonds were found. Researchers estimate the microscopic stones, which are invisible to the naked eye, to be more than 4 billion years old. Accordingly, these findings are almost as old as the planet Earth itself. Such an age allows conclusions to be drawn about the early history of the earth, but this is not the only reason why these Australian diamonds are controversial and hotly debated – until their discovery, the oldest diamonds were only dated back to about 3.3 billion years.

Emergence under natural conditions

In nature, diamonds are only formed under very specific conditions. The two decisive factors here are temperature and pressure. Science proves more precisely that diamonds can only be formed under temperatures of 1,250 to 1,500 degrees Celsius and in combination with extreme pressure of 100 to 150 kilobars. This limits the formation sites on earth to depths of 150 km in the upper mantle. Tectonic movements, i.e. the movement of the earth’s plates and crusts against each other, change the basic magma in the deeper layers of the earth. This in turn changes the deep rocks and produces new, metamorphic rocks, i.e. rocks whose shape has changed. Diamonds are an accompanying mineral of this transformation. Researchers have been able to narrow their guesses about the exact formation of diamonds within the tectonic process to three types of chemical reaction, the majority considering a simple reduction of carbon dioxide (CO2) to be the most likely.

Crystallization – the process by which crystalline structures form – is extremely slow, whereas the cooling of the freshly formed diamonds is extremely rapid. The rapid cooling prevents the diamond from turning into graphite. Under natural circumstances, the diamonds only reach the earth’s surface through volcanic eruptions, as the lava lumps take the surrounding deep rock with them. The mixture of lava and rock then forms kimberlite – diamond-bearing rock consisting of solidified volcanic material – and lamproites, which are where a diamond is found, although not its place of origin.

Synthetic diamonds – produced in the laboratory

Diamonds can be produced artificially by recreating the natural conditions of diamond formation as accurately as possible. The so-called synthesis requires extreme temperatures of 1,500 to 3,000 degrees Celsius and a pressure generation of approximately 55 to 60 kilobars.

The first successful synthesis took place in the 1950s, but shortly after the turn of the millennium, diamonds could also be grown from the air for the first time with the help of a photon plasmatron. Initially, it was only possible to grow small diamonds due to the high costs involved. Thanks to today’s technology, however, it is now also possible to produce large diamonds in this way for little money.

1797: The scientific breakthrough

For industry, the scientific breakthrough for the use of diamonds came in 1797, when it became known that diamonds are made of pure carbon. Attempts were made to reproduce the crystalline structure of diamonds by means of different, cheap carbon variants, until finally the first artificially produced diamond could be recorded. The Scottish chemist James Ballantyne Hannay thus made a name for himself in the late 1880s, closely followed by the equally successful chemist Ferdinand Frédéric Henri Moissan from France. Both scientists used different methods and there were many unsuccessful imitators in the 1890s. At the beginning of the 20th century, the British chemist Sir William Crookes was able to demonstrate his first successes based on Moissan’s findings, and Otto Karl Ruff from Germany followed his example barely 16 years later. Finally, in 1926, the American Dr. J Willard Hershey succeeded in producing his first diamond synthetically. This diamond can still be admired today in the McPherson Museum in Kansas.

1926: Parson uncovers scientific error

The Anglo-Irish scientist and engineer Sir Charles Algernon Parsons devoted almost 40 years of his life to the synthetic production of diamonds. He undertook numerous experiments and kept accurate records of his methodology and experiments based on the publications of Hannay, Moissan and Ruff. Then, in 1928, he had it published in his name that he was firmly convinced that not a single diamond had been synthetically produced up to that time and that the successes of his predecessors were merely synthetically produced spinel – a common, cubically crystallizing, transparent mineral. The fact that not one scientist in the world had succeeded in creating a synthetic diamond since 1926 certainly confirms this statement.

1941: New experiments and first successes

After Parson’s scandalous statement, diamond synthesis was not resumed until 1941. The American conglomerate General Electric Company (GE) joined forces with Norton and a few other companies and initially focused on the basic conditions for diamond formation in nature, namely high temperatures and extreme pressure. After the project had to be paused due to the First World War, the American Howard Tracy Hall and other scientists joined forces to form a team of experts in 1951. On December 16, 1954, Hall succeeded in creating the world’s first truly synthetically produced diamond, and after the process proved recipiable, Hall’s findings were published in the British science journal Nature. A few years later, Hall created new machinery that simplified the creation of diamonds and was awarded the American Chemical Society Award for Creative Innovation.

Scientists in the competition

In Stockholm, the scientists of Allmänna Svenska Elektriska Aktiebolaget, or ASEA for short, independent of Hall and General Electronic Company, were also successful and were able to present their first synthetic diamond on February 16, 1953, after about four years of work. However, this achievement was not published until the 1980s.

The Korean company Iljin Diamonds entered the industrial market of diamond synthetics in 1988 thanks to a Korean employee who had formerly worked at GE and shared their trade secrets with Iljin Diamond and numerous Chinese companies.

Differentiation between natural and synthetic

In general, natural and synthetic diamonds can be easily distinguished, because natural or “real” diamonds show an uneven growth, the growth conditions of diamonds in the laboratory, on the other hand, are extremely uniform. With the help of artificial impurities, however, nature can be imitated more and more, so that a distinction is nowadays hardly to impossible for laymen as well as experts without special measuring devices.

Use of diamonds in everyday life

Unlike the original occurrence of diamonds, the art of cutting the precious stones does not originate from India itself. It is assumed that first of all the Venetians dared to cut diamonds in the 15th century after Christ and brought the art of cutting from there to India. Via Paris, the knowledge about the processing of the valuable stones reached Antwerp and Amsterdam. Even today, Antwerp is one of the most important cutting centers in the world – it shares the top position with Tel Aviv and New York, while only smaller stones are cut in India.

Diamonds are generally used as abrasives and for setting drill bits and saw blades. Another large area of application is, of course, the jewelry industry.

Synthetically produced diamonds are used primarily in research, but also to a significant extent in special coatings, laser technology and electronics, or more precisely in the semiconductor sector.

Legendary diamonds

Throughout the history of diamonds, some individual pieces have left a special imprint on our timeline. Others are the subject of numerous legends and sagas. Many have been hotly contested or are found today as crown jewels in the possession of royal families.

Diamonds – We have collected the most expensive & biggest gemstones in the world for you here! The top 10 most expensive diamonds and the top 23 heaviest diamonds by carat. Which stone is the most expensive? Which stone is the most valuable? Large rough diamonds like the “Cullinan stone” has been cut from 3,106 carats to 9 foundation stones and 98 smaller stones. The current value is up to $2 billion. Stones like the “Koh-i-Noor” diamond is owned by the English monarchy and to this day is unmeasurable in value and still in first place.

• Article: The most expensive & biggest diamonds in the world

The blue Wittelsbacher

This blue color diamond is world famous and its personal history can be traced far back, to India in 1666. In 1722, the “Blue Brilliant”, as it was called at the time, became part of the imperial crown of Maria Amalie Josefa Anna of Austria. From 1806 to 1918 the famous blue diamond was in Bavarian hands as a crown jewel under King Ludwig III. In the winter of 2008, the at least 4-carat diamond was purchased at auction for a total of 18.7 million euros, making it the most expensive diamond purchased at auction until November 16, 2010. The buyer of the blue Wittelsbacher was the jeweler Laurence Graff, who had his latest acquisition directly recut in favor of the color intensity. A scandalous act which led to the stone being renamed the “Wittelsbach Graff”. By the way, the following diamond achieved the highest price within a campaign was a pink diamond for more than 46 million dollars – also paid from the wallet of Laurence Graff.

The cursed Koh-I-Noor

The colorless diamond Koh-I-Noor comes from an Indian legend that says that Koh-I-Noor brings death to all men who carry it with them. It passed through numerous hands until it became the property of the British East India Company in 1849. On the Company’s 250th anniversary, the then 186-carat diamond, which is still considered the largest diamond in the world, was honorably and formally presented to Britain’s Queen Victoria. She promptly had the stone recut, which reduced its size to about 109 carats. Since 1911, the Koh-I-Noor has been part of the Queen’s Crown and can still be seen today in the Tower of London along with the other British Crown Jewels.

The legendary Hope Diamond

This legendary diamond of about 45 carats also comes from India and is said to have been previously set into the statue of an Indian deity and is considered cursed. Between 1640 and 1667, the blue stone is said to have been sold to the country of France by a French adventurer; the adventure met its death shortly afterwards. In 1668 it was worn by the kings Ludiwg XIV and later Louis XVI. The Sun King had the stone re-cut and henceforth gave it the name “Le Bleu de France”. Legend has it that the diamond’s curse passed to its next owner, Queen Marie-Antoinette, causing her death. After the French Revolution, the stone was considered lost for years. Its next known owners were the English King George IV and the banker Henry Philip Hope, whose family remained in possession of the diamond for over 50 years, thus giving the Hope Diamond its name. The Hope diamond left the family after many disputes and finally came into the hands of the American Evalyn Walsh McLean, who kept the diamond with her until 1947 and left it behind after her own death after a total of over 30 years and many strokes of fate within her family. The new owner, an American jeweler named Harry Winston obtained the blue fated stone and promptly bequeathed it to the Smithsonian Institution. The magnificent stone can still be admired today at the National Museum of Natural History in Washington, D. C.

Pretty in Pink: the Darya-I-Noor

Pink and rose diamonds in particular are rare, but the Darya-I-Noor is perhaps the most famous of them all. The pink diamond Darya-I-Noor was recovered from the same mine as the colorless Koh-I-Noor and its name means “ocean of light” in Indian. It is said that many oriental rulers lost their lives because of it. Nowadays it is among the Iranian crown jewels.

Largest diamonds in the world by weight in carats

You can find more statistics at Statista

Diamonds in the magazine: More articles

1. Graff Jeweller: The Diamond Dealers
2. Tiffany & Co: Bracelets
3. Most expensive jewellery in the world

Graff Jeweller: The Diamond Dealers

Graff Jeweler – Finding the most valuable diamonds is part of their job. If you find a big diamond, you can get rich in one fell swoop. No way! Yes there is! The L’Incomparable diamond necklace contains one of the most valuable diamonds in the world. The necklace is worth $55 million with the L’Incomparable diamond, because it is the largest, inside flawless diamond in the world. Hard to believe but was. A little girl discovered the stone, amidst mining debris. In 1980, she found the L’Incomparable diamond in the overburden of the mine in the Democratic Republic of Congo: 407.48 carats. From it, the most exclusive pieces of jewelry are made, crafted by Graff. Right at the beginning we therefore show the cutting of the “Graff Lesedi La Rona”, you will see how a 1,109 carat rough diamond is transformed into an ultra-exclusive 302.37 diamond by Graff! The world’s largest, purest emerald diamond ever certified by the Gemological Institute of America (GIA).

• Graff jeweler

Tiffany & Co: Bracelets

Tiffany & Co. rings & bracelets – The luxury brand Tiffany & Co. has been making women’s hearts beat faster for over 180 years. With breathtaking engagement rings, sparkling pearls and charming necklaces, the brand enchants its customers anew every year. The brand, which once began modestly on the streets of New York City, can now be found all over the world. Its international success has also ensured that it now offers perfumes and other accessories in addition to sparkling jewellery. We have collected the latest creations of the brand for you here. At the end you will also get an exclusive insight into the private suite for VIP guests, where only the most expensive pieces of jewellery are sold.

• Tiffany & Co: Bracelets

Most expensive jewellery in the world

The most expensive jewelry in the world: diamonds, rubies, gold, platinum made by the best jewelers in the world. Graff, in particular, plays a huge role in the ranking of the most valuable jewelry. Diamonds are by far the most popular and well-known gemstone for lovers, jewelry lovers but also collectors. Diamonds are the hardest mineral on earth, so they can be used in jewelry for literally centuries without getting scratched. Did you know. The only mineral that can scratch a diamond is other diamonds! Diamond is therefore one of the most sought after mining products. Just like gold.

There is no precious metal in the world more sought after than gold. The famous “yellow metal” has been the standard by which wealth is measured for centuries, Even today, gold bullion is a primary means of private investment and wealth protection. Welcome to the world of gold, platinum, rubies and diamonds. The most expensive jewelry in the world: diamonds, gold & platinum!

• Most expensive jewellery

Back to the Capital Investment editorial.

Precious metals: advantages, disadvantages and risk

The most important facts about gold, silver, platinum & palladium at a glance:

• Did you know? The purchase of investment gold is exempt from VAT
• Purchase of historical gold coins or old gold subject to VAT
• Investment gold is bars and typical investment coins such as Krugerrand
• Purchase of silver and other precious metal bars taxed at the regular VAT rate of 19%.
• Silver and platinum coins often with favourable differential taxation
• Tip: If you keep precious metals for 1 year, the resulting profits are always tax-free – more on this later, in the question: Are profits from gold sales tax-free?

What is the purpose of money? Basis gold

What is the purpose of money and why do many not have any? In a nutshell, it’s this: money is a form of energy. Here are some thoughts from episode 15: What is money and why don’t most people have it?

Money is a voucher that gets its value only and exclusively from people’s trust in it.

Source: Alex Fischer – Reicher als die Geissens (Book).

The road to money is long, if you mentally get into its basics. For example, the question: What is trust? Firmly convinced of the reliability, trust you get when you are able to foresee the actions, behaviors or regularities.

Banking system: emergence

How did the first banks come into being? The answer lies with goldsmiths. They stored jewelry for people, like rings. People got receipts for them, which they could redeem. Travel was much easier this way, receipts instead of “a chest full of gold”. Goldsmiths realized that never all people redeemed their vouchers at the same time, so the idea was born to issue different vouchers for the same item – hoping, of course, that they would never all be redeemed at the same time. These vouchers were issued for interest. This is how the credit system came into being.

The blacksmith lends money that is not his, hoping to get it back with interest.

What precious metals are there?

Popular precious metals are mainly:

1. Gold: The classic among the precious metals
2. Platinum: (still) in demand in the automotive industry
3. Palladium:Alternative to platinum
4. Silver: Only with specialist knowledge

Precious metals can be used as a form of investment by the investor without much know-how (silver is an exception).

Unlike investments such as classic cars or art, a concrete value is tangible and is determined daily on the stock exchanges of this world. Investors only have to follow the current share price. But be careful: High fluctuations in the price of gold (and other precious metals) are also possible here, the risk is therefore medium to high (for silver, for example).

The return is medium depending on the price development. The return on precious metals is medium to high, depending on the price development, as is the risk of precious metals. Precious metals are an attractive form of investment worldwide. It can be used at short notice, without great know-how. Through stock exchanges and trading, concrete values are at your fingertips at any time. You as an investor only have to follow the share price. Of course, there are also risks with precious metals as well as the generally high fluctuations, as known from the gold price.

Advantages of precious metals

• Gold is mainly bought in times of crisis, thus the price development is often opposite to the stock prices (accordingly predictable)
• Palladium is very interesting because it can replace platinum in industry
• Platinum is particularly rare and valuable (as can be seen with cars as a capital investment or also with art as a capital investment, rarity is a top indicator), accordingly palladium is also such an interesting substitute.
• Silver is subject to strong price fluctuations in the everyday life of the stock exchanges, this opens up yield opportunities, but also carries risks, as can be seen immediately in the disadvantages.

Disadvantages of precious metals

• As described above, gold is subject to large fluctuations in contrast to equities. Major gains may therefore take a few decades to materialise.
• Palladium, like many important raw materials (coltan, etc.), is mined especially in crisis regions; the working situation of the local people is viewed critically.
• Platinum is used for jewellery, but mainly in the car industry, so platinum is very dependent on it
• Silver is subject to strong price fluctuations and is very dependent on the given economic situation, accordingly a lot of attention is required from you as an investor in trading.

The most valuable gemstones

1. The Pink Star (Diamond) for 67 million euros
2. Lesedi La Rona for 64 million euros
3. The Constellation for €55.2 million
4. Oppenheimer Blue for €50.81 million
5. Blue Moon of Josephine for 45 million euros
6. Fancy Intense Pink for 34 Million Euros
7. De Beers Millennium Jewel 4 for 28 million euros
8. The Unique Pink for 27.8 million euros
9. Orange diamond for 26.5 million euros
10. Blue diamond for 26.3 million euros

Source: Gevestor.com

Gold, Silver & Co.

How much gold is mined in a year?

Source: Goldsilbershop.de

Data: Markt-Daten.de (Internet: markt-daten.de, retrieved 01.10.2012); Silberinfo.com (2009), World Gold Production – Historical (Internet: www. silberinfo.com/gold/bilanz.html, retrieved 01.10.2012); Silberinfo.com (2009), World Silver Production – Historical (Internet: www.silberinfo.com/silber/bilanz.html, retrieved 01.10.2012).

Goldnugget

Is the sale of gold taxable?

Gold, like all other precious metals, is subject to taxes. But there are exceptions. Did you already know? The taxation of gold sales does not apply if your profit does not exceed the legal exemption limit in the trade. This is currently 600 euros. After the holding period of one year, the profit from a sale is tax-free. The regulation applies to investment gold as well as to old gold.

Source: Gold.de

Silver

Current rate

Source: ImmoAO

Gold rate

1000 gram gold bar

Silver rate

1000 gram silver bar

Platinum rate

1000 gram platinum bar

Palladium exchange rate

500 gram palladium bars

Evaluation, source: Mercedes Ranking, The Richest

1954 Mercedes W196

1st place: 1954 W196 – The engine: M196 R Straight 8 / 2496 ccm / 152,3 ccm in
Power: 290 hp / 216 KW at 8,500 rpm with a torque of 247 Nm / 182 ft lbs @ 6,300 rpm The 1954 Mercedes W196 reaches the red line at 9,500 rpm. The body is made of aluminium body parts, the chassis is extremely stable due to steel tube spaceframe. All this at a weight of only 835 kilos / 1.841 lbs and a top speed of 300 km/h / 186 mph.

• Model: 1954 W196
• Sold for $29.6 million

Video: Lewis Hamilton in 1954 W196

Lewis Hamilton and Sir Stirling Moss. Mercedes-Benz 300 SLR W 196 S in the legendary Parabolica!

1936 Mercedes and 1937 540 K Special

2nd place: 1936 and 1937 540 K Special – Apart from elegance and beauty, what is the performance of this model? The 5,401 CC Type M24 OHV 8-cylinder in-line engine with single twin carburettor root carburettor twin piston supercharger delivers 180 hp at 3,400 rpm (supercharger on). The whole with 4-speed manual transmission and 4-wheel vacuum-assisted hydraulic drum brakes.

• Model: 1936 and 1937 540 K Special
• Sold for $12 million and $10 million
• Last sale: $9.9 to $11.77 million

2011 SLR MacLaren Red Gold Dream

• 3rd place: 2011 SLR MacLaren Red Gold Dream
• Model: 2011 SLR MacLaren Red Gold Dream
• Sold for $10 million

1928 Mercedes 680 S Torpedo Roadster

4th place: 1928 680 S Torpedo Roadster – 1928 Mercedes-Benz 680S Torpedo Roadster by sold for among others $8,250 million (including commission). With 6,789 cc six-cylinder engine, overhead camshaft and dual carburetor root compressor, four-speed manual transmission, driven axles with semi-elliptical leaf springs and mechanical four-wheel drum brakes. The wheelbase is 134 inches. The rest, you can see in the video!

• Model: 1928 680 S Torpedo Roadster
• Sold for $8.25 million

live auction

1929 Mercedes 38/250 SSK

• Place 5: 1929 38/250 SSK
• Model: 1929 38/250 SSK
• Sold for $7.4 million

1955 Mercedes 300SL

• Place 6: 1955 300SL
• Model: 1955 300SL
• Sold for $4.6 million

Test drive: With the 1955 300 SL through Monaco

With Nico Rosberg and the 1955 Mercedes 300SL, this video takes us across Monaco.

1935 Mercedes 500K

• Place 7: 1935 500K
• Model: 1935 500K
• Sold for $3.7 million

2002 Mercedes CLK GTR AMG Roadster

• 8th place: 2002 CLK GTR AMG Roadster
• Model: 2002 CLK GTR AMG Roadster
• Sold for $3.5 million (Some Other CLK Variants Between $3 million and $3.3 million)

1929 Mercedes SSK Roadster

• Place 9: 1929 SSK Roadster
• Model: 1929 SSK Roadster
• Sold for $3.3 million

C112 Mercedes Concept, Vision SLR Concept, AMG Vision GT Concept

• 10th place: C112 Concept, Vision SLR Concept, AMG Vision GT Concept
• Model: C112 Concept, Vision SLR Concept, AMG Vision GT Concept
• Offered for $3 million

2010 Mercedes SLR McLaren V10 Quad Turbo Brabus “White Gold”

• 11th place: 2010 SLR McLaren V10 Quad Turbo Brabus “White Gold
• Model: 2010 SLR McLaren V10 Quad Turbo Brabus “White Gold
• Sold for $2 million

SLR McLaren Mansory Renovatio

• Place 12: SLR McLaren Mansory Renovatio
• Model: SLR McLaren Mansory Renovatio
• Sold for $1.5 million

Top10: Die teuersten Mercedes der Welt

Mercedes Maybach 2020 S650 – Der luxuriöseste Mercedes?

https://www.youtube.com/watch?v=PjUWHmZYy2s

Back to the Capital Investment editorial.

Fashion: advantages, disadvantages and risk

Also for designer fashion, let’s first take a look at the general parameters.

The great advantage with designer fashion is that fashion from designer labels can be easily purchased by any consumer in a boutique. It comes even better, when needed it offers practical benefits for the buyer. However, those who buy bags & co. from Hermés, Prade, Versace & Co. are not so much focusing on practical benefits as on value enhancement. The purchase and the transport is also anonymous, no buyer is registered.

If you have a lot of fashion pieces, you must have appropriate storage facilities. Risk and return are medium to high, for the right pieces. To emphasize once again: Risk is also high. Trends come and go, fashion brands also depend on opinions, nowadays especially on influencers.

Advantage

• Availability for Everyone
• Purchase anonymity

Disadvantages

• Risk in case of loss of value due to trend shift, news or influencers
• Storage capacities

Top 10 Luxury Fashion Brands

The top 100 list of the World Luxury Association – pure luxury! On Instagram, Youtube, TikTok & Co. everywhere you see luxury travel, expensive handbags, sports cars and exclusive products from jewelry to make-up. But who are the leading luxury labels? We have researched the top lists for you. Luxury goods are not only for personal well-being, in short lifestyle. Expensive products are also seen as an investment, for example handbags as an investment. We have the most important brands in the world for you! These brands promise long-term investment success: Top 10 luxury fashion brands.

High Fashion Brands

How clothing became haute couture

In 1857/8, the founder of haute couture Charles Frederick Worth opened the first fashion house. The Englishman wanted to sell his best pieces only to the highest of the country. He had a great influence on the fashion designers after him. However, some time has passed since then and fashion is going through a constant change.

There are countless high fashion designers who are responsible for the incredible variety on the runways and the constant change. Each one influences or has influenced the fashion world in their own way.

Chanel

Coco Chanel probably means something to everyone. Her real name was actually Gabrielle Chanel. She was one of the most influential fashion designers of the 20th century. Coco Chanel, who grew up in an orphanage from the age of 13, drew incredible strength from her past to make it all the way to the top of the fashion and beauty world. Her star sign is Leo, which could also explain her fighting spirit.

• Read more about Chanel here

The icon: Coco Chanel

Gabrielle Coco Chanel, grew up as a sad child in an orphanage, died a legend. Born in Saumur/France in 1983, she made a name for herself in the fashion industry 30 years later. Her specialty: unusually functional, casual and yet feminine elegant women’s fashion.

• More background? This is the life of Coco Chanel

Tip. Coco Chanel to Karl Lagerfeld: The best fashion quotes

Virginie Viard takes over Chanel

Chanel was dominated by Karl Lagerfeld in the last decades, now his right hand Virginie Viard takes over the creative leadership of the fashion house Chanel. Whether she can follow in the huge footsteps of Lagerfeld remains to be seen. The two have worked closely together for the past 30 years and Karl himself calls her the most important person in the atelier. Karl was the only person Viard called by his first name.

• All about the new woman at the top: Virginie Viard

Versace

Versace is a young luxury label that has remained family owned to this day. Besides the exclusive collections, the brand is also known for its troubled family life that brings some scandals.

It all began in Florence in 1976, when Gianni Versace was discovered and supported by a textile dealer in Florence. Gianni was a nobody in the fashion world until then, although he had designed for other brands before. After his first show, there were divided opinions. There were many critics who labeled his work as obscene.

• All about Versace

Calvin Klein #Ck

Calvin Richard Klein is an American fashion designer who was born in New York City in 1942. In 1963, he graduated with a degree in fashion design. After that Calvin worked for fashion houses until he finally brought his first own collections on the market. Calvin Klein convinces with simple, timeless designs and inspires fashion lovers again and again.

• More about Calvin Klein

Yves Saint Laurant

Behind the worldwide known brand Yves Saint Laurent, short YSL is much more than a company that brings beautiful bags, sunglasses, T-shirts, lipsticks, make-up and perfume on the market. The Frenchman Yves Saint Laurent (1936-2008) was already considered one of the most talented young designers in the 50s. Initially known as the right hand of fashion designer Christian Dior, after Dior’s death (1957) Yves succeeded in making his own name known as one of the most prestigious fashion brands in the world.

• This is YSL – Yves Saint Laurant

Christian Dior

Christian Dior was one of the most important fashion designers of the 20th century. He even founded his own fashion house in France. Not only did he revolutionize fashion in the mid-20th century, haute couture collections are still presented under his name today. At his fall-winter haute couture fashion show, you could see the most different cut dresses, pantsuits and skirts. Mostly the works are kept simple in one color, yet they become something very special through special cuts and shapes.

• This is Christian Dior

Jean Paul Gaultier

Playful, vulgar and extroverted – Jean Paul Gaultier has the most outlandish looks for fashion lovers. As a designer, he makes headlines with the latest trends, sells his perfumes worldwide and demonstrates his latest collections not only at shows, but organizes a kind of musical for his philosophy of fashion.

• All about Jean Paul Gaultier

Michael Kors

Michael Kors has been on top of the game when it comes to high fashion for a long time now. Everyone wants it. The Michael Kors bag. It comes in all colors. You can combine them super well, because they are very often one color and still very high quality is processed and looks.

• More about Michael Kors

Philipp Plein

German fashion designer Philipp Plein has always been creative. The 40-year-old put together his first bags and accessories from leftover exotic leathers. The Philipp Plein jeans are particularly famous. Everyone wants them, they are available for women and men in all different colours, shapes and sizes. Since not everyone can afford such an expensive designer jeans, there is only 30 minutes from Düsseldorf enternt a designer outlet, in which there are among other great haute couture brands also a Philipp Plein store. If on the weekend time and some money is there, you should definitely take a look there.

• More facts about Philipp Plein

Julien Fournie

Elegance, innovation and sublimator of women- Julien Fournie has the most unusual looks for fashion fans. As a designer he makes headlines with the latest trends, sells his clothes all over the world and presents his latest collections at fashion shows all over the world.

• More about Julien Fournie

Haute couture and prêt-à-porter

Haute couture and prêt-à-porter, what’s the difference?

• Read more here (external): Haute Couture and Prêt-à-porter

Prêt-à-porter – Zara, H&M, New Yorker, Vero Moda

Prêt-à-porter, also “ready to wear”, means “ready to wear” and thus refers to clothing that can be bought in shops, that is available in all sizes and that also keeps costs within limits. Prêt-á-porter is therefore not tailor-made, but is in principle ready for any possible buyer.

Since you can’t always spend tons of money on a basic shirt, most of the time when you want to buy everyday clothes, you head to stores like Zara, H&M or Vero Moda. These fashion chains offer fashion appropriate clothes that have been produced in large quantities and all possible sizes. Without such fashion chains, the average person would probably only have a quarter of the clothes available in their wardrobe at the moment. If you want to learn more about prêt-à-porter fashion, feel free to read my extra article on it: Prêt-à-porter.

• Read more about Prêt-à-porterhere

Haute Couture – Gucci, Prada, Louis Vuitton, Calvin Klein

Leave haute couture to the very rich? Never. Just watching the models at a fashion week presenting the latest collections, even if it’s just a video recording, is a great thing. Fashion is something quite varied and exciting.

Whether it’s haute couture or prêt-à-porter, one thing is certain, we can’t possibly do without either.

Investment Frankfurt – step by step to real estate

In all eras, real estate was pure gold for investors. Despite short-term fluctuations, real estate is, was and will remain the investment with stable value. However, with plots of land and inexpensive real estate, high profits can also be achieved in the short term.

You see, the topic of capital investment, investing and investing money is extensive.

We bring light into the dark and gradually introduce more individual regions and new objects in which you can invest.

From the small condominium with 40 square meters, which you rent out in order to generate profits for the next larger property, to the single family house or apartment building. Especially Frankfurt offers extremely lucrative investment opportunities. Thanks to the brexite, more and more people are moving to the banking city because of jobs and businesses. While Frankfurt is overcrowded with capital, there are extremely interesting properties and new buildings, especially in the bacon belt of Frankfurt.

Questions over questions: How do I invest money?

So many questions arise when it comes to capital investment:

• If I invested in my first property, would I better invest my money in a condominium or should I save a little longer and invest directly in an apartment building? When does which form of investment pay off?
• Where do I buy an investment: broker, bank or?
• From how many square meters is the investment worthwhile?
• All these questions will soon be answered exclusively in this magazine.

Capital investment Frankfurt: Bingen am Rhein – Expose

In a central location with a fantastic view of the Rhine and the Rheingau, 25 modern and bright condominiums will be built in the usual high quality. From the cosy two-room apartment with approx. 66 m² living space to the spacious four-room apartment with approx. 152 m² living space, this exclusive
Residential domicile for every situation in life the right property. The immediate proximity to the river as well as to several parks and local recreation areas, combined with excellent transport connections, make the Rhine Valley Terraces so unique.

The Rhine Valley Terraces.

• Start of construction: spring 2020
• Completion: End of 2021

Living – Why is it so beautiful on the Rhine?

Bingen offers picturesque landscapes, great perspectives and a great quality of life. Situated on the Rhine and Nahe rivers, the city is wonderfully embedded in vineyards and vine country. The beautifuly landscaped banks of the Rhine, the Rochusberg High Altitude Park or the Bingen Forest, which is only a few kilometres away, offer pure local recreation.

Cologne, Frankfurt, Wiesbaden and Mainz

Directly in the immediate vicinity are large cities like:

• Mainz < 30 km
• Wiesbaden < 35 km
• Frankfurt < 60 km
• Cologne < 200 km

The “secret wine capital of Germany” borders on no less than four wine growing regions. Medieval castles and the UNESCO World Heritage Site Upper Middle Rhine Valley create a landscape characterised by genuine Rhine romanticism. Celebrate at the international jazz festival “Bingen Swingt” or the Bingen sparkling wine festival. Be enchanted by the “Rhine in Flames” or the “Night of Seduction” – or convince yourself of the quality of the local wines at numerous festivals.

But Bingen is not only Dolce Vita. In the Focus ranking of 400 German administrative districts and independent towns, the Mainz-Bingen administrative district has been among the top 30 for years. Thanks to its immediate proximity to the Rhine-Main area, you can reach one of the economically strongest regions in Germany by car or by train.

Airport Frankfurt/Main and Hahn

To the airports Frankfurt/Main or Hahn you only need about 45 minutes. Bingen is really worth living. See for yourself.

Infrastructure

1. Short distances
2. Good connections
3. A lot of water
4. Lots of green

If you like short distances, you will feel very comfortable in the Rhine Valley Terraces. You can cover your daily needs in the nearby supermarket or in the pedestrian zone only a few minutes’ walk away.

It is only a few minutes to the banks of the Rhine with its magnificent green spaces and great gastronomy. The adjoining Rochusberg offers great possibilities for walkers or recreational sportsmen.

And despite the magnificent Rhine valley panorama, you have excellent connections – the motorway is only about five minutes away. The train station Bingen Stadt is also within walking distance.

Marina, banks, supermarket, doctor, park and local recreation, here you will find everything!

Comfort and quality of the system

As with all our properties, we will also place special emphasis on high-quality materials for the construction of this building. As a buyer, you still have the opportunity to influence your future home in the current phase.

When choosing the materials to be used, you can contribute your own ideas and thus give the corresponding unit your own personal touch. What awaits you in your new home:

• Threshold free access to the property
• Passenger lift from the underground car park to the respective residential level
• Underfloor heating in all living rooms
• Generously dimensioned soundproof windows with thermal insulation glazing
• Electric roller shutters
• Intercom system with monitor
• Generous balcony or terrace area in each unit
• High quality tile and parquet floors
• Internal network in each unit
• Controlled aeration and ventilation
• Parking spaces in the underground car park
• Central location in Bingen city

Real estate: Rhine terrace

This is what individual apartments in a building look like:

Apartment number 14 – example

Example apartment (number 14):

• Hallway 2,82 m²
• WC 3,61 m²
• Living/dining / cooking 26.04 m²
• Sleeping 20.33 m²
• Winter garden 11,88 m²
• Utility room 3,63m²
• Bathroom 8,38 m²
• Total living space 76.69 m²

Apartment number 21- Example

Example apartment (number 21):

• Hallway 10,14
• Children’s room 9,9
• Dressing room 5,34
• Bath 7,11
• Sleeping 13,51
• WC 2,69
• Living/eating/cooking 38,45
• Utility room 3,34
• Proportionate terrace 8,17
• Total living space 98,65

Interested in this or other objects in Frankfurt and surroundings?

investment now or later ?

Low bank interest rates make it necessary to look for sensible investment opportunities. Otherwise, owners of savings deposits run the risk of even reducing their assets through inflation instead of increasing them.

Risk more or sleep more calmly?

Shares and funds are the classic, lucrative forms of investment – but they are also exposed to risks and fluctuations. Many of our clients therefore now prefer the “nerve-saving” way: home ownership with constant monthly rental income. And with outstanding performance. Stress-free: letting and property management services. Typically, our buyers have hardly any effort with their capital investment. You leave the letting to us
and the property manager. At the same time we ensure the quality and substance of the property. Not infrequently, these same customers report that they feel good about owning their own property instead of an abstract securities account.

Living or renting: Investment and future home?

An increasingly common variant is to rent out an apartment initially as a capital investment and then later – when your own house has perhaps become too big and your originally beloved garden is only work
means – moving in yourself. Until then, we will of course take care of your future home so that you feel completely comfortable.

Frankfurt districts

You want to get to know the individual districts from Bergen-Enkheim to Frankfurter Berg? Here you will find lots of information about the individual districts:

• Altstadt
• Bahnhofsviertel
• Bergen-Enkheim
• Berkersheim
• Bockenheim
• Bonames
• Bornheim
• Dornbusch
• Eckenheim
• Eschersheim
• Fechenheim
• Flughafen
• Frankfurter Berg
• Gallus
• Ginnheim
• Griesheim
• Gutleutviertel
• Harheim
• Hausen
• Heddernheim
• Höchst
• Innenstadt
• Kalbach-Riedberg
• Nied
• Nieder-Erlenbach
• Nieder-Eschbach
• Niederrad
• Niederursel
• Nordend
• Oberrad
• Ostend
• Praunheim
• Preungesheim
• Riederwald
• Rödelheim
• Sachsenhausen
• Schwanheim
• Seckbach
• Sindlingen
• Sossenheim
• Unterliederbach
• Westend
• Zeilsheim

Back to the Capital Investment editorial.

Bonds: advantages, disadvantages and default risk

Bonds can be bought through any bank, tradable on the stock market safe government bonds pay little interest, the risk is low almost, there is almost none.

However, the return on bonds is low. Bonds can be bought through any bank. Another advantage, they can be traded on the stock exchange at any time.

What are government bonds?

There are different types of government bonds. Here in Germany, for example, these are the well-known German government securities, they work according to the same principle.

Bonds are issued directly by a state on the capital market, which can use them to finance its own state budget.

The most important at a glance:

• Government bonds are used to finance government spending, so you lend money to the government when you buy bonds.
• Government bonds pay a fixed interest rate to the investor each year, the so-called coupon.
• They are traded on the stock exchange and are therefore subject to price fluctuations, but the risk of default is lower.
• For example, the interest rate and the price of the government bond issued are based on the current credit rating of the issuing country.

Individual government bonds are rated by rating agencies. These use certain generally applicable letter codes. The agencies assign an “AAA” (the so-called “triple-A”) as the best grade.

Down it goes in steps of AA, A, BBB, BB and so on, down to D, the lowest rating. The letters can also be combined with plus and minus for an even finer gradation.

At what point is a bond considered a “junk security”?

Already from the grade BB+ begins the range, which is called junk.

What government bonds are there?

Usually, government bonds (treasury bonds) are available in the respective national currency. Unlike treasury bills (2 years), German government securities have a relatively long maturity. This term is, for example, 10 or even a whole 30 years.

So when you buy a government bond, you as an investor are lending money to the government. This bond is granted for a fixed period of time. In return, you as the lender receive a fixed interest rate, known as coupons. The nominal value of a bond usually remains the same over the entire period.

Even though the basic principle of all forms of government bonds is the same, individual details vary from country to country. In Germany, there are the following bond forms, which are grouped under the generic term “Federal securities” (abbreviation and maturity in brackets):

• Federal bonds (Bunds, 10 or 30 years)
• Federal bonds (Bobls, 5 years)
• Federal treasury bills (treasuries, 2 years)
• Non-interest-bearing Treasury bills (Bubills, 6 or 12 months)
• Inflation-indexed German Government securities (ILB, bonds: 5 years, notes: 10, 15 or 30 years)

British government bonds, for example, are called gilts. In America, government bonds look like this:

• Treasury Bills (T-Bills, 4, 13, 26 or 52 weeks)
• Treasury notes (T-notes, 2, 3, 5, 7 and 10 years)
• Treasury bonds (T-bonds, 10 and 30 years)

Yield with 10-year term

Ten-year government bond yields for selected countries worldwide in October 2019.

Positive interest income

1. USA with 1.7
2. Greece with 1.34
3. Italy with 0.92
4. Spain with 0.22
5. Portugal with 0.19
6. Ireland with 0.02

Negative interest income

1. Germany with – 0.45 %
2. Luxenburg with -0.39
3. Niderlande with -0.3 1%
4. Austria with -0.2
5. Finland with -0.2
6. Japan with -0.16
7. France with -0.14 %
8. Belgium with -0.14%

Source: Statista

Back to the Capital Investment editorial.

Cars: advantages, disadvantages and risk

In addition to the three basic rules of rarity, original condition and patience, the increase in value must exceed the running costs of the value investment car (sport, youngtimer and classic car).

What does classic car actually mean and when is a car a youngtimer? Youngtimers are usually cars and motorcycles that are at least 15 years old when built. At the same time, they must not be older than 30 years. If your car is older than 30 years, it already officially counts as a classic car.

Sports cars, youngtimers and classic cars can be easily obtained and purchased by anyone on the used car market, so getting started is easy. However, it is extremely important to have specialist knowledge. Experience in the field is absolutely necessary, for laymen completely unsuitable and also in the risk medium to high, without knowledge.

Advantage: Increase in value

• Active enjoyment of the object instead of ‘only’ investing in value
• Attractive increase in value

Disadvantage: Only in original condition

• You need a lot of experience and know how for the valuation and purchase
• High research effort for rare models
• Value appreciation only in original condition

Rule for the purchase as an investment

1. Rarity – the rarer the better
2. Original condition – especially for vintage cars
3. Patience – time pressure is counterproductive

The return on cars is medium to high if the appreciation is given by following the 3 rules for car buyers. Where there are high profits, there is always risk, with automobiles as an investment, the risk is high and investments should be made accordingly with planning. Cars are one of the investment objects especially for men, but for laymen the investment in cars and classic cars is unsuitable. We recommend a good alternative, such as funds and bonds. With a little more risk tolerance also real estate.

Reading Tip! The most expensive brands in the world

Tip. The 100 most expensive brands in the world.

1. Rolls-Royce
2. Bentley
3. Ferrari
4. Lamborghini
5. Maserati
6. Aston Martin
7. Bugatti
8. Spyker
9. Pagani
10. Koenigsegg

More on the subject of automobiles?

• Ferrari – Top28: The most expensive models
• Lamborghini – Top10: The most expensive sports cars
• Mercedes – Top10 – The most expensive Mercedes & McLaren

Top 10 Luxury Car Brands

The top 100 list of the World Luxury Association – pure luxury! On Instagram, Youtube, TikTok & Co. everywhere you see luxury travel, expensive handbags, sports cars and exclusive products from jewelry to make-up. But who are the leading luxury labels? We have researched the top lists for you. Luxury goods are not only for personal well-being, in short lifestyle. Expensive products are also seen as an investment, for example handbags as an investment. We have the most important brands in the world for you! These brands promise long-term investment success: Top 10 luxury car brands.

Ferrari dominates top list (6/10)

Did you already know? A car with an increase in value is not only positive for your wallet, it also increases your attractiveness, as can be seen here in a statistical survey. Over 1,000 people were surveyed on the topic: In which type of car does the opposite sex seem particularly attractive to you?

Source: Statista

Car Ranking: Top 10 and Number 1

The 10 most expensive cars in the world

What are the 10 most expensive cars in the world? Ferrari in particular dominates the list:

Ferrari 250 GTO for 48 million

More on that in a moment! At the last auction, the Ferrari achieved the absolute record price of 48.4 million US dollars. Estimated to be up to 70 million by now. Tips, options and prices – more about Ferrari as a capital investment.

1957 Ferrari 335 Sport Scaglietti

Became the first to hit 203.015 mph, currently selling at auctions for up to $32.1 million (last sold in 2016)

https://www.youtube.com/watch?v=JAY-MbBjjSU

1954 Mercedes-Benz W196R

The last one sold at auction for $29.7 million…

1956 Ferrari 290 MM by Scaglietti

Formula 1 sports car with 3.5-litre V12 engine sells for up to $28 million at auction

1967 Ferrari 275 GTB/4*S N.A.R.T. Spider by Scaglietti

300 hp twelve-cylinder for up to 27.5 million

1964 Ferrari 275 GTB/V Speciale by Scaglietti

Rarer than the 250 GTO (the most expensive car in the world, below) with only 12 examples left.

1956 Aston Martin DBR1

Sold for $22.6 million at auction in Monterey in 2017

Le Mans winner 1956: Jaguar D-Type

The 1956 Le Mans winner: Jaguar D-Type won the 1956 24 Hours of Le Mans with a 5 lap lead

1939 Alfa Romeo 8C 2900B Lungo Spider by Touring

The 2.9-liter eight-cylinder sports car out of competition.

1961 Ferrari 250 GT SWB California Spider

Selling price $18.5 million

Source: Driven Luxury Cars

The most expensive car in the world

There are some exclusive pieces on the current car market. There are also some rare collector’s items that many are particularly keen on.

Ferrari 250 GTO in detail

Currently, there is one car that surpasses all others. The most expensive car in the world is currently the Ferrari 250 GTO!

The Ferrari 250 GTO already counts as a classic car. But what makes the 250 GTO so special? The sports car was produced extremely rarely and is still today, there are only 36 copies in the whole, wide world.

At the last auction, the Ferrari achieved the absolute record price of 48.4 million US dollars.

Converted, this amounts to almost 42 million euros.

In 1964 the model was developed.

Engine Start: Ferrari 250 GTO

Cheap alternatives to Ferrari & Co

Only 36 of the GTO were produced, so the model is correspondingly rare on the market. If you’re looking for normal equipment that you can sometimes use yourself, for example for a nice trip on the country road in the summer, there are also affordable models such as the BMW 3.0 CSi and VW Beetle. Both are increasing in value, as is the Porsche 911 Carrera RS. For example, the VW Beetle 1300, built from 1967 to 1973, is gaining 45.5% compared to last year.

Value appreciation BMW 3.0 CSi and VW Beetle

The development in the overall market is slowing down, yet both models are gaining. As Autobild.de reports, “the BMW 3.0 CSi (E9), built between 1971 and 1975, experienced a 46.7 percent increase in value last year,” it continues, “making the sports coupe the classic car with the biggest price increase nationwide in 2018, according to the index.”

Currently, there are only 441 registered vehicles of the 200 hp BMW 3.0 CSi (E9) model left on the market. The market value is “at 70,000 euros (condition 2)”.

It’s a completely different story with the VW Beetle, which is the most frequently driven classic car here in Germany. At the beginning of 2018, “the Kraftfahrt-Bundesamt (Federal Motor Transport Authority) listed 36,528 examples with H license plates in the vehicle register”.

Back to the Capital Investment editorial.

Sports cars: Corvette to Lamborghini

Of course, it’s not always about money, cars have to be fun too! That’s why we’ll finish with a few new models that might eventually become cult objects, like the Ferrari 250 GTO or the Mercedes-Benz W196R.

Back to the Capital Investment editorial.

Building savings for your own property

With building savings, you benefit from various subsidies such as premiums from the state. You can use your building savings contract for the purpose of building, buying or renovating a house. However, a building savings contract is also interesting for property owners, for example to finance modernisation measures. The respective costs depend heavily on the provider.

Building savings is one of the top 5 most popular forms of capital investment among Germans.

Source: Statista

Procedure and phases

The strengths of a building savings contract lie in its fixed predictability. A bauspar contract consists of two phases, the savings phase and the accumulation phase. With a bauspar contract, you first save about half of the planned bauspar sum (see bauspar calculator), the other half is then given as a loan at a fixed interest rate.

There are many questions as already described, from what is the savings phase to how long is the term of a building savings contract to what is understood by a building savings contract? But also the advantages and disadvantages are important for many who want to start saving. What are the advantages of a building savings contract?

No equity capital necessary

The highlight of any building society contract is that it can be used without any equity capital at all, it can be set up anywhere, on site in branches but also online in comparison portals.

The disadvantage is that the payout is bound to strict regulations, and the risk of default is extremely low, especially in the case of old contracts. Did you already know? It is possible to convert building savings contracts into capital investments by paying premiums – however, this advantage is usually limited to the old contracts just mentioned. Unfortunately, such contracts are hardly ever offered in the current interest rate situation. The current yield of bauspar contracts is mediocre.

Facts about building savings

The most important 3 facts about the building society contract:

1. No equity capital necessary
2. Support through premiums from the state
3. Earmarked (according to strict regulations) for house construction, purchase and conversion

Building savings really pays off for everyone. It’s easy to take out, and the plan has a clear goal. Whether you want to live rent-free or save for retirement, building savings is a real must for building up equity.

Advantages

• No equity capital necessary
• Individual building savings plan that suits your needs (more under Building Savings Calculator below)
• Support through premiums from the state
• Fixed interest on credit balances
• Extremely low risk of default

Disadvantages

• Earmarked (according to strict regulations) for house construction, purchase and conversion

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Building savings calculator

The calculation is intended to provide you with an initial orientation as to what purchase price you will be able to afford in the end. The indicated purchase price is an approximate, non-binding value. The following parameters are required for the calculation:

• Current cold rent (e.g. 900 Euro)
• Desired savings (e.g. 400 Euro)
• Move-in date (e.g. 8 years)
• Equity capital (e.g. 50,000 euros)

From these variables you would have the following result

• My possible purchase price
  292,000 Euro
• + incidental expenses (approx. 12 %)
  36,000 Euro
• My total costs
  328,000 Euro

You want to calculate yourself? Here you will find a good calculator for your building society contract:

• LBS building society calculator
• Real Estate Scout 24

Build or buy? New building costs

Build it yourself or buy it, that’s the big question! There are individual advantages and disadvantages to both. We take a look at the most important facts you need to consider when building new or buying real estate.

• More tips on building or buying? Read all about real estate as an investment here.

New construction has many advantages, including, for example, the various options you have as a builder. This concerns the design of the house but also the design of the property. You will be the first to move into the property, so everything is new and of high quality, including the technology in the house. Of course, there are also disadvantages, for example, craftsmen are rare and building a house is expensive. You will have a lot of work ahead of you, applications and also visits to the building site.

Average prices for building land 2017, source: Federal Statistical Office

Table: Construction costs, source: Federal Statistical Office

Loan term for house construction > 5 years

Almost all loans for real estate have a maturity of 5 years or more. Here is the stock volume of loans to households for house purchase with banks in the euro area in November 2010, in billions of euros.

Source: Statista

Expert tips for new construction

1. Check every building contract for errors, preferably by a competent person, such as a civil engineer, an expert or even an architect.
2. Ask to see the developer’s guarantees, which the company has deposited with banks. Should the developer go bankrupt during the construction phase, your construction would be secured.
3. Pay only according to the progress of construction, with each further, central step you transfer another partial amount to the developer
4. Cheap is never good in construction, you should pay attention to that, even when you are getting quotes. In the end, there are always pitfalls that you don’t notice as a private person.
5. Become a member of a landowners’ association, because here you can get legal and economic answers to your questions, even free of charge.

Helpful Links: Buy & Sell Real Estate

Finally, here are some helpful links for your real estate search:

• Real estate portal – Immowelt for the search
• Real estate portal – Immoscout24 for the search
• Luxury real estate agent – Real estate purchase and capital investments
• Real Estate Sales – IHV Real Estate Agents Germany

Back to the Capital Investment editorial.

Share risk assessment: advantages and disadvantages

Access to shares is easy for everyone, online or in the bank branch. Every bank offers such securities accounts, some also charge securities account management fees.

For laymen, there is always a risk, because trading is confusing. Stock tickers, news, tweets, many things have an influence on prices and developments. The (daily) trading with shares requires competence and experience. When speculating, high losses are immediately possible. Thus, the risk but also the loss in case of doubt is medium to high. Who wants to start safer in the trade, which should fall back to ETFs. Where there is shadow, there is also sun. Thus, the returns of shares are just as medium to high compared to traditional investments such as savings account, time deposit or overnight money. You can read more about this in our article on index funds (ETF).

Facts about shares as an investment

The most important 3 facts about shares as an investment:

• Know how required
• High risk (complete failure also possible)
• Purchase fees must be taken into account in the volume

Stocks offers great returns, as we also show in the dividend payout example on our article. It is only important that you study the subject of shares in detail before you make your first purchase. We tell you what you need to consider in the first steps.

Advantages

• Easy access via banks or direct banks (online)
• High yields are possible
• Tax advantages

Disadvantages

• Many banks charge custodian fees (tip: direct banks, you often save a lot of money here, even when buying. Read more: Buy shares direct bank)
• Unclear trade, especially for laymen
• Price fluctuations in real time

Buying shares? Definitions and tips

Before buying your first securities, you should check which type of investment you are. Basically, you have two options.

1. Passive investor (ETF, index fund)
2. Active investor (share)

Passive (ETF) or active investor (stock)?

Both forms offer advantages. Trading individual stocks provides for higher price breakouts, thus potentially more profit (and loss). The risk increases. If you want to trade more cautiously, you can buy index funds (ETFs).

Passive investor

The word ETF portfolio stands for “Exchange Traded Fund” and is an exchange-traded index fund. This index fund tracks the performance of an index, such as the DAX in Germany or the NASDAQ in the USA. But these are only the best known representatives. As you will see in the list of the best, biggest and cheapest funds.

New York Stock Exchange

At their core, ETFs combine the advantages of stocks and funds into one product, so you can invest money directly in entire markets through ETFs. A real advantage.

Active investor

In contrast to funds with manageable risk, you can also act as an active investor in trading. As an active investor, you invest in individual stocks. This costs time, because it is about analyzing individual companies to determine which paper you want to buy.

As an active investor, you will be affected more quickly by price fluctuations. Even one piece of bad news in the morning about a single company can greatly minimize your capital if you don’t diversify.

Source: IhrHausverkauf.de(Buy Stock)

Difference between house bank and direct bank

With the bank you have two options, either you go through the classic house bank, such as Volksbank and Sparkasse. Here you can make the purchase directly through the banker or your second option, the buy your shares or funds online, at a direct bank. Direct banks are better known providers such as comdirekt or degiro but also others.

What is the advantage of a direct bank? As a rule, they are significantly cheaper than in a traditional branch bank. Direct banks save on the branch network and employees. The difference between a traditional branch bank and a direct bank is clear: In the branch bank you have a direct contact person and you get advice if you want. You don’t have this direct contact person at a direct bank.

If you prefer to go to a local bank, then you should make sure that it has a well-developed network. Especially if you sometimes travel or have business appointments in other cities. Which banks have the most branches?

1. Deutsche Bank AG (2,984 branches)
2. Commerzbank AG (1,530 branches)
3. Postbank AG (1,092 branches)
4. Unicredit Bank AG (933 branches)
5. Wüstenrot Bausparkasse AG (500 branches)
6. Targobank AG (351 branches)
7. Santander Consumer Bank AG (324 branches)

Source: IhrHausverkauf.de(buy stock, as of Jun 30, 2019)

Shareholders in Germany

How many shareholders are there in Germany? In 2018, Germany recorded an average of around 4.55 million direct shareholders. The current figures for direct shareholders in Germany from 1996 to 2018 (in millions):

Source: Statista

Most expensive shares in the world

1. Berkshire Hathaway
   US Holding with €242,784.90 and a market capitalization of €399.02 billion.
2. Lindt & Sprüngli AG
   Swiss Chocolate with €58,375.96 and a market capitalization of €12.9 billion.
3. Sika AG
   Swiss specialty chemicals with €6,363.68 and a market capitalization of €6 billion.
4. Zoological Garden Berlin
   Zoo with 5,703.01 and a market capitalization of €62.73 million.
5. Saxon Milk Inc.
   belongs to the Theo Müller Group with € 5,025.01 and a market capitalization of € 50.25 million.
6. Cantonal Bank of Zug
   Swiss bank with €4,592.51 and a market capitalization of €62.73 million.
7. Mortgage Bank Lenzburg
   Swiss bank with €3,852.89 and a market capitalization of €277.3m.
8. Metal Zug AG
   Swiss Household Appliances, Infection Control, Wire Processing and Real Estate with €3,171.31 and a market capitalization of €1.1 billion.
9. SGS SA
   Swiss testing, inspection, certification and verification company with €2,121.68 and a market capitalization of €16.2 billion.
10. A.P. Moeller Maersk B
    Danish shipping company, gas & oil production with €1,633. Market capitalization33 billion €.

Source: Finanzen.net

Is it worth buying shares?

If you hold shares for a long time, you will receive dividends at the end of the financial year if you are successful.

271.1 % Increase in dividends in 15 years

In this chart you can see very impressively how dividends increase year after year, billion after billion. This is the development of the dividend payments of the DAX companies in the years from 2003 to 2019 (in billions of euros). Just the jump from 2004 to 2019, which is 15 years, added 27.8 billion euros in annual payouts. An increase of 271.15 % compared to the same year.

• 2003: 10.3 billion
• 2005: 15.2 billion
• 2007: 23.5 billion
• 2009: 22.1 billion
• 2011: 26.0 billion
• 2013: 28.0 billion
• 2015: 30.1 billion
• 2017: 32.1 billion
• 2019: 38.6 billion

Source: Statista

How much does it cost to buy shares?

If you are interested in buying shares, you will find many different pricing models online, each broker has its own. Here, the individual prices per package purchase depend on your online broker.

The standard fees for the purchase of shares are usually five to eight, maximum ten euros. In addition, there is a fee of 0.25% depending on the trading amount. The fee per purchase is usually limited to an upper maximum amount.

If you are online a lot, you will quickly find alternatives via search engines and comparison portals. Flat-fee offers from various established discount brokers such as onvista are attractive, for example.

Equally interesting are promotional offers, where at certain times the volume-dependent fee or the entire fee is waived completely.

Fees and costs for the purchase of shares summarized:

• Purchase fee of 5 – 8 Euro, maximum 10 Euro
• Trading amount mostly 0.25 % of purchase
• Tip. Flat-free offer like at onvista

First stock purchase? Should you invest a lot or a little? Read more on the topic here with a stock purchase example calculation.

Back to the Capital Investment editorial.

Equity funds: advantages, disadvantages and risk

If you want to play it safe, you should invest in funds. Before buying, however, there are many questions to be answered.

• What is an ETF simply explained?
• What kind of funds are there?
• What are transaction costs for funds?
• What are the ongoing charges with a fund?
• How stable is the performance?
• What are the costs of an ETF savings plan?
• What are the best ETFs? – more on this at the end, with the top 3 funds

Facts about funds

The most important 3 facts about funds as an investment:

• Binding term (earlier exit associated with losses)
• Minimized risk through bundled individual stocks
• Purchase fees must be taken into account in the volume

For those who can put money aside, funds are an excellent alternative to individual stocks. Bundled funds are less sensitive because they contain many players that are more stable in the aggregate. The returns are accordingly more moderate than with shares, but as you can quickly see in our best practice of dividends, the investment is worthwhile. In the last 15 years alone, dividends have tripled, from 2004 to 2019, which is 15 years, brought an additional payout of 27.8 billion euros annually. An increase of 271.15% on the comparable year.

What is an ETF simply explained?

ETFs are pooled stocks, so risk (default, profit and loss spikes) goes down. The nuts and bolts of the trade-off. ETFs are associated with fixed maturities.

Maturity of ETF securities

If you are familiar with the classic account model, you can compare shares and funds with overnight money and fixed-term deposits. Call money is always available, there is no capital commitment. If you have opted for a time deposit model, your money is parked with a certain term. During this time you have no access to your capital. If you need it prematurely, you will incur losses.

So here you are weighing up, is it money that you may need or can you put your capital aside and tie it up for a period of time.

Let’s start with our usual assessment: advantages, disadvantages and risks of trading with funds.

Funds at a glance

Funds can be set up just like shares at any bank. Different investment portfolios are possible and so a corresponding gradation is possible according to the risk appetite of the individual investor. Of course, everyone knows the tax advantages that are possible with capital transactions. Due to the large selection of fund products, you can spread the risk well.

Each purchase and fund management costs fees. Your capital is tied up for the long term, and liquidation is only possible at a loss before the end of the term.

The current return of funds is medium (compared to the investment alternatives) and the risk of funds is absolutely manageable.

Advantages

• Simple deposit facility with banks
• Adaptation to your own risk appetite: different portfolio types are possible
• Tax benefits

Disadvantages

• Long-term capital commitment
• Dissolution only possible with loss
• Custody fees

Buy funds? Definitions and tips

Before buying your first securities, you should check which type of investment you are. Basically, you have two options.

1. Passive investor (ETF, index fund)
2. Active investor (share)

Passive (ETF) or active investor (stock)?

Both forms offer advantages. Trading individual stocks provides for higher price breakouts, thus potentially more profit (and loss). The risk increases. If you want to trade more cautiously, you can buy index funds (ETFs).

Passive investor

The word ETF portfolio stands for “Exchange Traded Fund” and is an exchange-traded index fund. This index fund tracks the performance of an index, such as the DAX in Germany or the NASDAQ in the USA. But these are only the best known representatives. As you will see in the list of the best, biggest and cheapest funds.

New York Stock Exchange

At their core, ETFs combine the advantages of stocks and funds into one product, so you can invest money directly in entire markets through ETFs. A real advantage.

Active investor

In contrast to funds with manageable risk, you can also act as an active investor in trading. As an active investor, you invest in individual stocks. This costs time, because it is about analyzing individual companies to determine which paper you want to buy.

As an active investor, you will be affected more quickly by price fluctuations. Even one piece of bad news in the morning about a single company can greatly minimize your capital if you don’t diversify.

Source: IhrHausverkauf.de(Buy Stock)

List: Best, Great, and Cheap ETFs (Index Funds).

As of: 12/31/2019

Best MSCI World ETF by 1-year fund return

Largest MSCI World ETF by fund volume in EUR

Cheap MSCI World ETF by Total Expense Ratio

Source: JustETF.com

How much does it cost to buy ETFs?

If you are interested in buying an ETF, you will find many different pricing models on the internet. Here, the individual prices per trade depend on the online broker. The standard fees are usually five to eight, maximum ten euros. In addition, there is a fee of 0.25% depending on the trade amount. The fee per purchase is typically limited to an upper maximum amount.

If you are online a lot, you will quickly find alternatives. For example, flat-fee offers from various established discount brokers such as onvista are attractive.

Equally interesting are promotional offers, where at certain times the volume-dependent fee or the entire fee is waived completely.

Fees and costs for ETF purchase summarized:

• Purchase fee of 5 – 8 Euro, maximum 10 Euro
• Trading amount mostly 0.25 % of purchase
• Tip. Flat-free offer like at onvista

Your first ETF purchase: invest a lot or a little?

Another unbeatable advantage of fund trading is that you can start with small investment amounts. While you have to present 10% – 20% equity capital to the bank when investing in real estate, which can quickly be 50,000 – 100,000 euros in major cities such as Hamburg, Berlin, Munich and Cologne. The entry into equity funds is often profitable with only 10% of the buzzer, about 5,000 – 10,000 euros per package.

Order quantity and purchase fee

Why shouldn’t you buy smaller packages? There is an order fee for every trade. If you buy a package for 100 euros, many banks directly 5-8 euros order fee. Accordingly, your portfolio shrinks directly to 92-95 euros in value. This means that you have already made the first 5-8 euros loss, which must first be compensated for by a corresponding increase in the price of the fund. This means a 5% – 8% loss in value directly at the time of purchase.

Purchase of 100 Euro Ø 6.5% loss
plus 0.25% trading fee

If you buy a package of 1,000 euros, the trading fee of our exemplary 5-8 euros is much less important. With a purchase of 1,000 euros, you retain 992-995 euros in value. Accordingly, the loss in value is reduced to only 0.5% – 0.8%.

Purchase of 1.000 Euro Ø 0.65% loss
plus 0.25% trading fee

With a package of 10,000 euros and an order fee of 5-8 euros, the loss in value is directly reduced to 0.05% – 0.08%.

Purchase of 10.000 Euro Ø 0.07% loss
plus 0.25% trading fee

That’s why it’s worth buying larger packages directly.

In addition, there is the aforementioned purchase fee of approximately 0.25% of the traded package.

Of course, the management fee for your portfolio is just as favourable. The more value you hold, the smaller the effect on your portfolio.

Selling funds: Sales Opportunities

This survey shows the expectations about the sales opportunities for funds from the perspective of the fund companies. Sales opportunities for funds from the perspective of fund companies in 2010 (in percent).

Find the best sales according to experts:

1. Equity funds
2. Mixed investment funds
3. Alternative investments
4. Pension funds
5. Convertible bonds
6. Real Estate Funds

Source: Statista