Why invest in natural coloured diamonds?
There are many reasons to consider investing in natural coloured diamonds. These material assets make for an ideal safeguard against volatile markets. Natural coloured diamonds are proven to offer generous returns and, as the most concentrated form of wealth on the planet, they are easy to transport, protect and conceal.
Natural coloured diamonds are the rarest, most concentrated form of wealth on the planet. With shrinking supply, demand has continued to drive value over the past four decades. These exceptional stones grew in popularity after being seen fashioned on celebrities like Halle Berry and Jennifer Lopez. Record-breaking bids, such as a blue moon diamond that sold at Sotheby’s auction house for $48.6 million USD in 2015, have this relatively young but incredibly potent investment market piquing investor interest.
The following sections provide a basic knowledge of the natural coloured diamond investment market as well as some real-world examples and tips for taking the next step toward adding these precious gems to your investment portfolio or personal collection.
Material assets that meet expectations
Material or “hard” assets are important to include in your investment portfolio. In an unsure global economy, liquid assets like stocks, equity and mutual funds do not always provide stable returns. Material assets are becoming a more common means of storing wealth.
Mass inflation and excessive printing of money is a threat to the value of currency. To counter this, investors are increasingly moving more of their financial holdings into tangible hard assets.
In recent years, more practical and enjoyable material assets have become popular, such as fine art and precious jewellery. Despite the aesthetic appeal of jewellery, the most economic treasure investments are rare loose gemstones.
Natural coloured diamonds are an alternative, non-market-correlated material asset. Like fine art, diamonds are authentic and cannot be overproduced. These assets are not officially priced on any global market index. They get their true value from their rarity.
This makes natural coloured diamonds an ideal hedge or safeguard against inflation. Prices for these diamonds have historically risen with inflation.
Diamonds and The Great Recession
During the 2008 economic crisis, known as “The Great Recession” or “The Sub-Prime Mortgage Crisis,” property values plummeted by upwards of 75 per cent. In the US and Canada, retirement funds shed more than half their value. The global economy was collapsing and nearly every asset in the world was negatively affected — except natural coloured diamonds. Unbelievably, these diamonds continued to break records at auctions in 2008. The appreciation of natural coloured diamonds during The Great Recession shows how they can hold up against volatile conditions.
Reliable returns and generous gains
Natural coloured diamonds have been unaffected by the constant fluctuation of traditional investment markets. For decades, these diamonds have increased in value by between 15 and 30 per cent annually. This makes them some of the most valuable short- and long-term investments available.
Of all finite resources, natural coloured diamonds are the most rare. Their value is greatly influenced by demand. It is estimated that only one of every 10,000 carats of mined diamonds is certified gemstone-grade.
Natural coloured diamonds are an ideal material asset for long-term growth. They have increased in value every year for the past four decades, at both the supplier and retail level. Even in the short-term, these diamonds are known to appreciate by at least 15 per cent per year—often doubling their value within four to five years.
The world supply of natural coloured diamonds is in constant decline. Their value continues to rise, making them the most reliable and secure material asset available to investors.
Natural coloured diamonds are universally valued; grading methods are consistent internationally. They are flexible in today’s globalized economy and will hold their value in any currency.
Diamond mine closures
Sources for natural coloured diamonds will eventually run out. We’re already seeing this trend take form today. The Ellendale mine in Australia produced about half of the world’s rare yellow diamonds until it unexpectedly closed in 2015. Australia’s Argyle mine, which currently produces more than 90 per cent of the world’s pink diamonds, is also expected to close within the next few years. Pink Argyle and flawless yellow diamonds are now considered some the rarest materials on Earth. One- and two-carat intense pink diamonds have been known to increase 1,000 per cent in value over one year.
Diamonds are forever
Natural coloured diamonds are the most concentrated form of wealth on the planet. Most of these precious gems can fit in your hand. They are easy to transport, keep safe and pass down from generation to generation, making them one of the most practical hard assets available.
There is nothing more valuable per unit than natural coloured diamonds. Their portability makes it possible to hold millions of dollars in your pocket. Diamonds are easy to transport and, as one of the hardest known natural materials, they are extremely durable when handled and transported under the proper conditions.
Diamonds allow extreme discretion. They can be concealed and kept private during transport or travel. Natural coloured diamonds are considered a privately held asset, so they are not overseen by any bureaucracy. They also do not require continuous reporting to revenue agencies. Natural coloured diamonds are one of the easiest forms of wealth to pass on through generations while continuing to grow in value.
Whether in the form of loose stones or affixed to beautiful jewellery, natural coloured diamonds can be sold using both private and public methods. Public auction houses continue to secure record-breaking prices for natural coloured diamonds.