Looking to Diversify Your Portfolio? The Advantages of Investing in Diamonds
What are the Advantages of Investing in Diamonds?
- Diamonds have proven their value over many decades as excellent stores of value. Their prices rise steadily over the course of many years and are not subject to the volatility of stocks, currency, and bonds.
- Diamond investment also provides high-worth investors with an extra investment vehicle and enables them to diversify their portfolios.
- There are no costs associated with holding diamonds, unlike currency-based assets or real estate which brings with it maintenance fees and local and state and national/federal taxes.
- Diamonds are small and lightweight and easily portable. Large amounts of diamonds can easily be transported and concealed in emergency situations and secured in a safe deposit box.
- They require no reporting for tax purposes and can be privately enjoyed.
- Although diamond prices are subject to corrections, this is the case with commodities such as gold and platinum as well. However, the underlying asset has a high intrinsic value that cannot be denied and which enables diamonds to hold their values over many years.
For more advantages of investing in diamonds, keep reading.
- Just as real-estate analysts say about the lack of space in big cities: nobody is creating new land. In other words, the opportunities are finite and that means prices have to rise.
- No large new mines have been discovered for a generation and the existing big mines across the world are running out of diamonds.
- The new mines that have come on stream in recent years produce significantly fewer diamonds and have a shorter lifespan.
- Diamond firms are extending the mine life of some of their large operations, but this is only temporary and will only extend them for a decade at most.
Where is the Demand for Diamonds Coming From?
- Polished diamond prices have declined in recent years, and this has created an invest investment opportunity for diamonds.
- Demand for polished diamonds and jewelry are growing in volume terms in existing markets and in growing emerging markets, especially in India and China and in South East Asia. These countries are following Western trends, in particular, the fashion for bridal jewelry and diamond jewelry to mark important milestones in life.
- The major producers understand this as well and are managing their supplies in a way that ensures that goods will not flood the market in order to ensure diamond prices remain high. Annual global rough diamond production reached around 180 million carats in 2006-8 but has since fallen back to less than 130 million carats. Analysts believe there is almost no likelihood that rough output will rise to historic levels ever again.
- There is a belief among many industry players and outside analysts that demand will outpace supply in the coming years as new markets open up. That will lead to rising prices.
Prices According to Rapaport Diamond Index (RDI)
RDI: The Rapaport Diamond Index is the average Rapaport Price List price for D-H, IF-VS2, RapSpec A3+ diamonds.
Prices of 1-Carat Diamonds
Prices of D-IF Diamonds
Diamond Investment Initiatives
- The Rapaport Group, a leading diamond industry player, has launched an Investment Diamond Certificate for diamonds that meet Rapaport’s severe gemological and investment grade standards. All diamonds are graded by the Gemological Institute of America (GIA) as well as Rapaport Laboratories. The diamonds must be 0.50 ct. and larger, D-H, Color, IF-VS2 clarity, and meet Rapaport specifications.
- The advantage of the Rapaport Investment Diamond Certificate is that it provides buyers with complete quality assurance, allowing diamonds to be traded safely online without requiring a physical examination. For any information regarding high-quality diamonds, please contact us at Meira@meiraw.com.
The Case of Fancy Colored Diamonds – Beautiful and Rare
- Only 1 in around 10,000 diamonds are Fancy Colored stones.
- Prices of Fancy Colored diamonds have been especially strong and secured high prices at auctions at Sotheby’s, Christie’s and Bonhams.
- Fancy colored diamonds are popular and desired across the globe. They have been collected and traded by royalty for hundreds of years.
- Prices have increased over the past 30 years at least. The results of auctions prove the strength of colored diamonds as they consistently break price records at the major auction houses.
- Unlike all other investment options, diamond jewelry can be worn and loved and appreciated while continuously rising in price.
- Fancy colored diamonds have no fixed price. Their rarity is what determines market value. The Argyle mine in Australia, where almost all of the world’s most valuable pink diamonds are mined, will close it in 2018 as the diamonds run out.
- Fancy Color diamonds are often seen and publicized by Hollywood movie stars, popular singers and sports stars which helps to further increase market demand and prices.
- The Fancy Color Research Foundation publishes a quarterly Fancy Color Diamond Index which gives what it says are accurate readings of the changes to colored diamonds.
A Risk-Free Investment?
- As with any other investment, your decision should be based on objectives, risk tolerance, and timeframe. However, diamonds can provide a solid investment and a diversification alternative.
- Fancy Colored diamonds, because of their extreme rarity, provide a particularly appealing investment opportunity.
- A diamond specialist with a finger on the pulse of the world’s diamond markets is required on an ongoing basis, in order to provide investment advice. Contact us to learn more about the advantages of investing in diamonds.