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Large and Fancy Coloured Diamonds - An investor's best Friend
 
Most of us have heard the clique 'diamonds are a girl's best friend" but in today's world diamonds are not only a girl's best friend they are an investor's best friend!

Over the decades, diamonds have been known to hold their value. During periods of recession investors can count on diamonds to retain their value and appreciate in value during periods of economic boom. The last few years are no exception. We have seen the prices of large diamonds and fancy coloured diamonds skyrocket!

As with all goods, the law of supply and demand are in operation. However, with diamonds, as with oil, the supply of naturally occurring diamonds is finite. Due to this scarcity, as the demand for these types of diamonds increases the limited supply has not been able to match the demand, hence driving up their prices.
 
Why Invest in Diamonds?
 
Although diamonds have been around for centuries, the recent upswing in price is due in part to the changing economic times. The globalization of the world economy has resulted in the globalization of wealth and demand. With oil hitting record levels, going up to as much as US$150 a barrel, oil rich countries, and countries such as China who have found new wealth are now competing for the scare resources of the world and hence pushing up commodity prices.

In addition, we have witnessed the precipitous fall of the US stock market. The US dollar has been devaluing and continues to do so around the world - it's no longer the premier basis for international trade. In this time of great economic uncertainty, investors are looking for ways to secure the wealth. While some investors are moving to invest in gold, there have been a steady movement of wealthy investors to hold their wealth in diamonds.
 
Fancy Coloured Diamonds
 
Fancy coloured diamonds are highly rare in existence and are only found in a few locations around the world.

Naturally occurring coloured diamonds not only put one in awe of their beauty but they are one of the most valuable gemstones on Earth. Once considered strange, these diamonds are now highly sought after by collectors, celebrities and the wealthy.

In the last couple of years Diamantaires have seen the price of coloured diamonds increased at a rate of more than 10% per annum. In the European CEO Magazine, Summer 2006 issue, Andrew Coxon, vice president of DeBeers, indicated that the price of coloured diamonds have risen by 25% within the last year. Similar sentiments were expressed in 2008, in an interview with Harold Seigel, of Rare Coloured Diamonds in Florida who said "A rare coloured diamond bought today could increase in value five to ten times in the next 10 years." This level of appreciation has proven highly attractive to investors.

While most collector gemstone generally hold stones at least a carat in size, the same does not hold true for coloured diamonds due to their rarity and their availability in small size.  Unlike colourless diamonds, rare coloured diamonds have no fixed price and sell for several times above colourless diamonds.  For example, in August 2008, Rare Coloured Diamond sold a 0.9 carat fancy red diamond for over $200,000, a similar size colourless diamond would have sold for $1,000 to $5,000.

Coloured diamonds offer investors stability, long-term appreciation, portability and privacy! With fancy coloured diamonds, one can choose to invest in small or large stones the return potential is huge due to their scarcity and the high demand.
 
Large Diamonds (5 - carats and above)
 
A number of articles have been written in the last few years regarding the soaring price of large diamonds. In an article written by Martin Rapport in January 2008 issue of Rapport it was quoted that "the price of a 5-carat round, D, Internal Flawless diamond was up 51% over previous year, at 106,000 per carat on the Rapport Price List. Prices for larger stone had risen even more!"

In a July 2008 article by Scott Reyburn, he quoted Francois Graff of Graff Diamonds as saying, "Five years ago, dealers were paying $70,000 per carat for colourless diamonds of 10 carat and more and now we're paying $200,000 per carat." This is a significant increase. In the same article, it was quoted that the price of 5-carat diamonds increased by 76.5% in the year to May 2008.

Diamonds not only serve the purpose of showcasing beauty for the wealth buyer who want to lavish his spouse, but it also serve as a good protection of wealth for those who wish to secure the value of their wealth.

Whether you are considering a rare fancy diamonds for it's exceptionally beauty and unprecedented potential to appreciate in value, or whether you are looking to hold the more affordable colourless diamonds, diamond presents investors with an opportunity to make significant return and/or secure their wealth.
 
For further information on investing in diamonds please contact us at info@adamas-intl.com
 
Disclaimer:
Adamas International is not an investment advisor nor is it licensed to provide investment advice. Adamas International strongly recommends that their clients seek the advice of their financial advisors, gemologists and/or attorneys if they are seeking to invest in quality diamonds as part of an investment portfolio or strategy. rare natural colored diamonds have been subject to upward price movements historically. Adamas International cannot guarantee that upward price movements of rare natural colored diamonds which have occurred historically will continue in the future.

Posted on : November 2008