Why Are Colored Diamonds Attractive to Investors?
Colored diamonds are the most portable form of wealth in the world. They are a private, unregistered asset and their rarity and strong demand fundamentals make them an attractive option for hard asset investors.
Do the 4C’s Pertain to Colored Diamonds?
Yes, they certainly do, however with clear diamonds the color grading scale is alphabetical. For example, the best color grade for a clear diamond is “D” whereas with colored diamonds “Fancy Deep” is the highest color grade.
What Makes a Colored Diamond Rare?
All colored diamonds are rare in their own right. Out of 100,000 carats of diamonds mined, only 1 carat will turn out to be Fancy colored. There are approximately 110 million carats of diamonds mined each year and only 2000 carats will be cut and polished colored diamonds. Out of those about 1100 will be desirable for investment purpose.. The Argyle mine in Australia, mines 30 million carats a year and less than 590 are jewelry grade. Less than 1/10th of 1% are pink diamonds and out of those, only an handful are investment quality.
Why Are Colored Diamonds Such a Strong Investment?
Supply and demand is the strongest reason colored diamonds are a strong investment. Demand for colored diamonds is increasing as supplies are falling. A major jewelry house closed 6 diamond mines in Africa in 2006 - 2009 and the Argyle mine in Australia is ceasing mining in 2011-2012. The newest mines in Canada and Russia are not producing much in the way of colored diamonds so, with supplies of colored diamonds falling and demand increasing, prices should increase substantially with time.
How Do Colored Diamonds Provide Wealth Preservation?
The core holdings of wealthy and successful people have always included estate jewelry, precious gemstones and important diamonds as both status symbols and as a means of maintaining wealth. Increasingly colored diamonds are a core holding because of their rarity, mystique and inherent value created over the years. Other assets, such as stocks and bonds, are subject to the movements and fluctuations of market conditions. Real Estate cannot be moved and is the first asset seized in times of turmoil. Precious gems have the ability to provide a safety net during times of political and economic upheaval. During WWII, countless people left Europe for America with only their jewelry holdings to help them weather the storm. When China became communist in the 1960’s, hundreds of Chinese who fled the mainland in hopes of starting their lives anew were able to do so with nothing more than diamonds and jade sewed into the lining of their clothes. Finally, many families in Southeast Asia who lost enormous portions of their wealth virtually overnight escaped the economic crisis of 1997 unscathed due to their gem portfolio holdings.
Colored Diamonds Grading?
The Gemological Institute of America (GIA) grades colored diamonds in this order from lowest to highest:
Faint, Very Light, Fancy Light, Fancy, Fancy Intense, Fancy Vivid, Fancy Dark, Fancy Deep.
Diamonds Rarest Colors?
Red, Blue, Green, Orange, Pink.