Why invest in diamonds
Diamonds are showing up more frequently in investment portfolios and retirement funds as a viable investment option. Diamonds are a great investment idea, coupling their small size and weight with a promise of easy portability, discretion and durability. Their high value and increasing demand also promise high returns. They are seen as inflation-proof precious gems with prices that are forecast to continue rising given that they are limited in supply.
Rarity value
Certified diamonds of high quality are sometimes bought as investments. But it is the rare high quality colored jewels that garner the most interest from dealers and investors. Only one of every ten thousand diamonds found is colored. So they are the rarest of the precious gems, and this rarity increases both demand and, in turn, value.
High prices
Out of all the colored diamonds, the rarest and most exquisite are the fabled red and pink diamonds . Other colored diamonds get their color from additions of other elements like boron, nitrogen or hydrogen into their carbon structure during creation. But the magnificent red and pink diamonds are the results of a rare mutation in the molecular structure.
In fact, it is thought that only 30 true red vivid diamonds of the highest quality exist in the world. They are nearly always found and sold in sizes of less than a carat. This is why red stones are the only diamonds that investors accept in values of less than a carat.
Projected growth
Pink stones are slightly more available and command the highest price after the red among diamonds and can sell for hundreds of thousands of dollars. Some pink stones even sell for many millions depending on size and cut. Blue diamonds are also on the higher end of the diamond spectrum being high priced, much sought after and very rare.
In 2017 a pink diamond was sold for 71.2 million dollars in Hong Kong. At 59.6 carat it was a massive size, but its hefty price also reflects the growing value of pink gems.
Pink diamonds have seen an impressive 180 percent growth in value in the past 10 years, while blue diamonds have attained 70 percent growth. Meanwhile on average colored diamonds have seen an impressive 122 percent price increase. It is expected that this price hike will continue in the future.
Marketable assets
As investors, it’s best to find the middle ground between something precious and something marketable and pink and blue diamonds fulfill both criteria. Unlike the red diamonds whose shocking prices may make them seem unattainable, thus leaving them the province of collectors and diamond enthusiasts only. A pink and blue diamond is something people can actually aspire to own, making it more marketable.
The wedding and engagement ring market primarily drives the demand for pink and blue diamonds. Pink diamonds are seen to symbolism romance and tenderness while pink is the quintessential color for woman. Blue also symbolizes love meaning eternal devotion, peace and spirituality.
Increasing Demand
Pink diamonds are frequently on display on the hands of celebrities or royalty. This celebrity endorsement expands the public awareness and desire for those colors. It also elevates the price of these gemstones.
More disposable income in emerging markets like China and India as well as an expanding societal adoption of Western customs like diamond engagement rings means demand for the outstanding and lovely blue and pink diamonds will only be amplified.
China already accounts for 12 percent of all diamond sales, but with a huge population, an upwardly mobile middle class and a growing appetite for investments and the fine fripperies of life its market share can only grow.
Low Supply
Another thing that makes pink stones an excellent investment is the fact that the supply of pink diamonds in the world is set to be sharply curtailed in the near future.
More than 90 per cent of the worlds pink diamonds come from a single mine in Australia called the Argyle mine. And out of every million carats of diamonds evacuated from Argyle, only one will be a vivid natural pink. The Argyle mine also provides much of the other colored diamonds to the world, including the dreamy blue.
But Argyle is closing its mining operations in the next year, and no new source of pink diamonds has been found. A sharp decrease in supply while demand remains high means that you can’t lose with an investment in colored pink or blue diamonds .
Certification
The Gemological institute of America categories gems base on color cut clarity and carat value. They also provide expert certifications that show your diamond is a true natural colored diamond. A certificate of Authenticity from Argyle also adds value as Argyle colored diamonds are considered to be finer quality than those mined elsewhere.
Conclusion
Diamonds are small in size but have an exceptionally high value. They are rare, and the world delights in ownership of something unique. Their production is set to dramatically decrease due to closure of the Argyle mine as well as depletion of other existing mines. Their demand remains on an upward trajectory because of rarity value, market trends and celebrity endorsement. Chances of prices increasing and getting a good return are fairly stable. Plus, they are durable as a long term investment being the hardest known material in the world. They are discreet, and a tiny stone can be literally added to a portfolio or locker. All of these factors contribute to making pink and blue fancy diamonds a desirable investment option.
