Why Invest in Diamonds and More FAQ About Diamond Investment (2024)

The current situation of the financial market is exposed to radical changes in very short periods of time. Investment advisors have stated time and time again that preserving your wealth with long term investments as opposed to attempting to quickly maximize your capital gain, is the right path to take.

Only, how do we know where to invest? Obviously, there is no one person that can predict the future and those that claim they can are mistaken. However, we do possess the ability to make an educated decision based on the historical price performance and the current market demand.

As technology advances and mining operations improve, more and more diamonds are extracted from the earth. However, fancy colored diamonds will not be around forever. In fact, The Argyle diamond mine for example, which is known as the producer of the finest Pink Diamonds in the market, is estimated to close down by 2018. Volatility in any market tends to create activity as we see in today's commodities and investors aim to grow their portfolios in order to secure their future.

Why Invest in Diamonds

Contrary to colorless stones as a result of how unique each color diamond is, no fixed price list exists. The price potential that these stones hold is phenomenal. As evidence to this listed below are some solid facts of how color diamonds, the most trending asset class of 2012, have performed compared to other major assets in the financial market.

Price Performance – Color diamond prices have consistently appreciated over the past 30 years. In 2003 a 3.58ct Fancy Intense Pink sold for USD115,000 P/C, in 2007 a 3.86ct Fancy Intense Pink sold for USD390,000 P/C, and in 2011 a 4.59ct Fancy Intense Pink sold for USD 625,000 P/C. That means that in just 10 short years Pink diamond prices have increased by 443%!

Record Breaking Prices at Auction – There were 12 record breaking prices both set and broken by color diamonds sold at auction between 2007 and 2012.

For example, the record for ‘Highest Price Per Carat’ was broken by a 6.04ct Fancy Vivid Blue in 2007, a 3.73ct Fancy Vivid Blue in 2008, a 7.03ct Fancy Vivid Blue in 2009, and a 5.00ct Fancy Vivid Pink in 2009.

Unbelievable Comparison Trends – A 0.50ct round brilliant colorless diamond, of excellent color and a high clarity grade, has appreciated only 10% over the past 10 years. Whereas a 0.50ct Fancy Intense Argyle Pink Diamond has appreciated by 375% over the same time frame!

Between the years of 2002 and 2012 the Dow Jones has had a 5% overall increase. Platinum has shown a stronger growth, but only reached 130%. Prices of a 5.00ct Fancy Intense Yellow Diamond managed to increase by 350%.

Are Colored Diamonds Considered a GoodsInvestment?

What best describes the benefits of any one specific asset class is in essence its ‘supply and demand’ – its potential to sell for profit down the line.

In the past color diamonds were recognized as extremely rare items which only the most rich and famous managed to attain. However, as time progressed together with the wide spread of the Internet, fancy color diamonds slowly began to grow interest among collectors and diamond enthusiasts.

With the help of some of the most popular Hollywood stars adorning these luxurious and beautiful pieces of color diamond jewelry the demand among the general public has increased exponentially.

Investment Diamonds - Which are the Best Diamonds to Invest In?

Although each of the incredibly rare stones has appreciated in value, Argyle Pink Diamonds, Fancy Yellow Diamonds of a high clarity grade over 2 carats, and Fancy Blue Diamonds have all proven as strongest investment pieces. As the rarest color available, RED diamonds possess excellent investment potential as well, but require a considerable investment.

Yellow and Pink diamonds hold the highest market demand, while Red and Blue diamonds are the rarest colors around.

What are the Benefits of Investing in Diamonds

Second to ‘supply and demand’ additional benefits should be considered when assessing whether it is a good investment option or not. Following are a number of points to consider when evaluating Natural Fancy Colored Diamonds as an investment option;

• Fancy Color Diamonds are not correlated to any financial institution, country, or domain. They are very well-established, globally recognized goods.

• They are small, they weigh next to nothing and they are extremely portable. Therefore, large amounts can easily be transported and concealed in emergency situations.

• They are extremely durable. As the hardest element found, diamonds can withstand just about any environmental situation. (In fact, it is a said that a 30-carat stone could withstand the pressure of the Empire State Building!)

• They are a highly private asset. They can be easily stored for safe keeping privately or in safe deposit boxes. They require no reporting for tax purposes, and can be savored on a daily basis.

• They possess multiple functions as an asset. For example, one can purchase, for investment purposes, a 5.00-carat, Fancy Intense Yellow diamond and set it in a ring. Deriving pleasure from its beauty by wearing the ring does not detract from the value in any way.

Learn more about investing in colored diamonds.

Contact LEIBISH to discuss your diamond investment options and allow us to introduce you to the world of color.

Contributor: Benji Margolese