Stop Buying Diamonds and Start Investing in Them

It's Time to Stop Buying Diamonds and Start Investing in Them

It is no secret that tight supply and growing demand, especially in emerging countries, is increasing the prices of diamonds throughout the industry, making supply and demand difficult to accommodate. Major diamond collectors and diamond dealer's agree, it's time to stop buying diamonds and it's time to start investing in them. Similar to gold price, both white diamonds and natural fancy colored diamonds have experienced drastic price increases over the span of a few years.

Imagine, natural fancy colored diamonds were formed billions of years ago and only recently have come to the earth's surface for the world to see. In fact, not so long ago they were disregarded as geological oddities. Today, however some natural fancy colored diamonds are considered the most concentrated form of wealth on the planet.


The following are recent world record sales from Sotheby's Hong Kong Magnificent Jewels Sale Oct. 5th, 2011: A 6.01 Carat Fancy Vivid Blue and Pink Diamond ring achieved $10 Million USD. This was a world record price per carat for any Fancy Vivid Blue Diamond.

"According to auction results, for every 112 Picassos offered at auction, 1 blue diamond is sold."

A 4.19 Carat VVS1 Fancy Vivid Mandarin Natural Orange Diamond and diamond ring without modifying hues was realized at $2.9 USD million. This was a world record price per carat and the highest price for any fancy vivid orange diamond at auction.

Literally for every 10,000 carats of colorless diamonds mined, 1 carat colored diamond is found. Natural fancy colored diamonds are so rare and remarkable that they account for 1% of all diamonds mined today. Renowned for their scintillating colors from Champagne, to Silver, to Pink, Blue, Purple, Violet, Yellow, Red Orange, Black, Green and more, some colors are so rare that they go directly from mines to auction houses such.

"This giving the male demographic a whole new incentive to buying big beautiful sparkling diamond engagement... investments."

According to auction results, for every 112 Picassos offered at auction, 1 blue diamond is sold. Due to their increasing rarity, natural fancy colored diamonds have never in the history of recorded time been poised to appreciate more.

Appreciation

Natural fancy colored diamonds have shown consistent appreciation since tracking began in the 1970's, with some colors appreciating 50% to 100% and seemingly more on some days. Just recently -a five carat Yellow diamond has appreciated 40% over last year, currently selling in the range of $75,000-$100,000.

According to journalist Michelle Smith from Diamond Investing News, Gem Diamonds whose Ellendale mine supplies Tiffany & Co. with Yellow diamonds, announced that in the first quarter of 2011, it sold natural fancy Yellow diamonds to Tiffany & Co. for an average of $3,379 per carat compared to $2, 545 per carat during the first quarter of 2010 (2011). Had you invested in certain natural fancy Pink diamonds from the Argyle mine twenty-five years ago, you would have seen your investment appreciate 100 times (not 100%) its value.

Today, we foresee the same pattern of appreciation occurring in Champagne, Cognac, Chocolate, Hazel DiamondsTM, Silvermist and natural fancy Black diamonds.

"Because Brown variations are still currently priced below colorless (white) diamonds they remain for the moment an affordable alternative for many investors."

In the last five years, we have witnessed the Champagne, Cognac, Chocolate and Hazel DiamondsTM diamond industry go from literally zero to $5 billion in 5 short years. Because Brown variations are still currently priced below colorless (white) diamonds they remain for the moment an affordable alternative for many investors.

According to KPMG, demand for diamond jewellery has never been stronger, as they foresee a growth of total revenues from 185 billion USD in 2010 to 230 billion USD in 2015. The Indian and Chinese market for diamonds is predicted to have surpassed the U.S. market in size by 2015. All of the major diamond retailers such as Harry Winston, DeBeers, Tiffany and Laurence Graff have opened up flagships in Asia to anticipate demand from China's booming economy.

It is important to note that Champagne diamonds are relatively new to the general public and the potential for new buyers in both established western markets and developing eastern markets is significant. Industry experts foresee more and more institutions migrating to diamond investments once this market trend becomes more apparent. According to the Huffington Post, "Demand for diamonds is growing for two reasons: firstly, they are one of the most reliable investments during financial disturbances and secondly, the middle class is developing in India and China, which has started buying diamond jewellery (2011)."