The article published a few days ago in Wall Street Journal has not surprised in the diamond business. According to the American daily, investors are increasingly interested in pink diamond as an investment, with a predilection for the colored diamond. To learn more, we interviewed Argyle Diamond Investments, the diamond sales platform for individuals and professionals.
The analysis of the Wall Street Journal is without appeal. Investors, disappointed by the increasingly lower returns of traditional investments, no longer hesitate to shift their investments to pink diamond, once favored by the richest families.
Today, large fund managers who disdained this type of investment become customary of this type of transaction. Their interest is focused primarily on the pink diamond whose prices have risen sharply in recent years.
"Last year in Geneva, the 14.62-carat Oppenheimer Blue Diamond auction reached a record $ 57.5 million in a few minutes, making it the most expensive diamond ever sold." says Argyle Diamond Investments. "This type of transaction, that is to say the purchase by large investors of colored diamonds at very high prices, is no longer exceptional and above all, is no longer the preserve of some rich collectors" .
The monetary policies of major central banks and low interest rates are causing large investors to redirect their funds. And everything about luxury is profitable. Investment funds, which have now become major players in this sector, have pushed diamond prices higher. "Today," says Argyle Diamond Investments, "the demand for pink diamonds is so strong that some brown diamonds, formerly reserved for industrial use, find buyers in the markets.
The rarity of the pink diamond makes it a coveted asset . For example, there is only a small handful of pink diamonds in the world. The GIA, one of the most famous gemological laboratories, would not have seen a single between 1957 and 1987. The rose diamond saw its prices increase by 180% between 2009 and 2016. What to fan the greed . Yet only 12 to 15% of transactions are done through auctions . For the rest, these are private sales or individual offers.
For Argyle Diamond Investments, the conclusion is clear: "In all probability, the demand for colored diamonds should remain very firm. It is therefore very likely that prices follow. This momentum should also benefit the white diamond ".
The value of a diamond is evaluated from four criteria, because there is diamond. The first criterion is its size. The second is the weight expressed in carat, the third is the purity of the stone: does it have defects or is it completely transparent? And finally, it's the color. There are yellow, blue and pink diamonds.
The more a diamond is heavy, pure, without inclusion, ie impurities, colorless and perfect size, the more expensive it will be. A round pink diamond of a carat that has no defects is negotiated between 10,000 and 15,000 euros.
There is no day-to-day world course. The price varies according to the quality of the stones and their weight. And we must know that each stone is unique. For the same budget, it is better to buy a stone smaller than a large stone of lesser quality that would not be perfectly colorless.
Beware of yellowish diamonds. This is advice if you want to make a gain or at least find it in case of resale. Apart from jewelery and auctions where you make a fun purchase, there are now websites that offer diamond placement.
Many savers want to diversify their wealth to get better returns than conventional products like stocks, bonds or real estate. Websites offer you returns that go up to 8.5% per year. It's tempting, but if you look closely it's high-risk, the diamond placement sites appear every month or so and they are able to attract you by producing a very exhaustive documentation but that concerns little the details.
The advice is not to make it a safe haven that guarantees your wealth. Make it a pleasure to adorn a hand, ear or neck. Only professionals and diamond investors are able to know this very particular market. And do not be fooled by the latest financial performance of gems.
The AMF, the financial markets authority, has just recalled that so-called "exotic" investments are high-risk investments. Wine, manuscripts, rare books, vintage cars (products that are very popular now because of low interest rates) are risky investments reserved for very wealthy investors who devote only a very small part of their capital. Small saver, do not consider that you make a sustainable investment. Just make yourself happy.