Diamonds are good for a lot of things – as jewellery, as a gift, as a way to lighten your wallet as well. But, when used to investment, they contribute in a major way in improving your financial portfolio. While there might be multiple options to choose from when it comes to natural diamonds, pink diamonds take the cake, especially for investment options.
As an investor, you could say there are multiple conventional options available when it comes to building your investment portfolio. So, why look at diamonds? Pink diamonds have great potential for capital gains as an investment tool. The value of pink diamonds has grown by an average rate of 13.8% per year as per quite a few studies done. Traditional financial markets are subject to global financial crises, but pink diamonds have retained their insulated status over the past decade.
The rarity of pink diamonds imbues them with a market value almost 10 times the price of colourless diamonds. David Bennett of Sotheby’s International Jewellery Division has said that fewer than 0.02 percent of diamonds submitted at the Gemological Institute of America every year is pink ones. You could say that there are other coloured diamonds as well, but none are as rare as pink diamonds. Some notable mentions include the Pink Star sold for 261 million dirhams, the Graff Pink worth 169.5 million dirhams and the Fancy Light Pink by Harry Winston sold for 47 million dirhams.
If you have never dealt with diamonds as an investment tool, there are certain points to keep in mind when you are considering investing in pink diamonds. Some of the important ones are stated below –
Pink diamonds are rare and pricey. Considering them as an investment tool will need ample funds. For example, fancy light pink diamonds worth $10000 per carat 38 years ago are now being valued at $220,000 per carat. You can estimate from this what to expect next?
Pink diamonds are valued by the colour, cut, clarity and the number of carats. The default 4 Cs of diamonds. In the case of pink diamonds, colour has the highest priority. Based on a hue description made of four words, light, fancy, intense and vivid, the value changes. Vivid being the highest grade. Pink diamonds can have an orangey pink or brownish pink colour due to a secondary colour. This also affects value. The purer the pink, the higher the value.
Testing of colours and gradation is quite a subjective process. It is always a good idea to invest in diamonds that have a certificate of authenticity and valuation from a recognised organisation. The price gap between a fancy vivid and a fancy intense pink diamond can be quite big. It is the primary reason the flawless fancy vivid Pink Star fetched such a price at the auction in April 2017.
But why the rush? Diamonds are not fueled that they would be running out so soon. New mines are being discovered regularly and that would make sure you have plenty of options to choose from when you want to invest. Here, we would suggest you look up for a term, ‘list of Argyle pinks’. The Argyle mine in Australia is famed for being the major source of the best pink diamonds available to date. Its operations will be stopped in 2020.
With a major supply source being cut off, you can imagine the kind of price hike that will happen for pink diamonds. What do you think the best time to invest in pink diamonds is? Isn’t it now?