While those with additional funds to invest would usually turn instinctively to property, stocks or the foreign exchange market to grow and manage their wealth, there is an increasing number of high net worth individuals who are investing in pink diamonds, both as loose stones and also set in jewellery.
One property investor on the Gold Coast purchased a rare 2-carat red diamond, which is at the top end of the pink diamond range, for AU$1.85 million as a 50th birthday present to herself in 2011. After being set into a ring, it has since been valued in 2013 for AU$4 million. Needless to say, the investor who purchased the stone is extremely happy with her appreciating asset.
Pink diamonds are typically worth at least 20 times their white diamond equivalent. When it comes to the different shades of pink diamonds available, there is everything from stones with a brownish-pink colour to a purple-pink tone, and finally at the highest end of the pink diamond market are the reddish-pink diamonds. These are the most valuable of all pink diamonds.
While other fancy diamonds receive their colour from the trace elements within them, it is an extreme pressure and heat which leads to the crystal lattice becoming distorted in some stones which leads to them absorbing light differently, giving them their pink colour.
What makes pink diamonds so unique
Pink diamonds are not only beautiful, they are also extremely rare, accounting for less than 0.02% of the total amount of rough diamonds produced in 2009. On top of this, the supply is extremely limited. In general, pink diamonds tend to be smaller than white or other coloured diamonds.
The majority of pink diamonds found in the world come from the Argyle Mine in Western Australia. 90% of all pink diamonds are mined in this location on an annual basis; each year the mine produces approximately 1 million rough carats, and of that only 1 carat is fit for sale. All diamonds from the Argyle Mine that are larger than 0.25ct since 2009 are certified and laser inscribed with a certificate number, so it is easy to verify them using the official Argyle Pink Diamonds website.
At present, Rio Tinto says the Argyle Mine has already lived out two-thirds of its mine life. While a decision to mine underground will extend its life expectancy until 2020, this has already driven the value of pink diamonds higher, with a clear shortage on the horizon once the mine eventually closes.
According to Rio Tinto, between 2002 and 2010 the index price of Argyle Pink Diamonds’ tender based on an event selling only the highest quality stones the mine produced rose 108%. An adjusted measurement of the equivalent value of white diamonds over the same time period saw colourless stones only rise by 22%.
Experts say that the price of pink diamonds will only continue to rise as more investors become aware of this growing investment opportunity and understand the rarity of these precious stones.
There is also a growing number of high net worth individuals in both China and India who are opening up the market even further for pink diamonds, with an increase in demand for pink diamonds on mainland China in recent years.
Tips for purchasing pink diamonds as an investment
When looking at pink diamonds as an investment opportunity, there are a few important factors to be aware of. Colour and clarity are very important; there are a broad spectrum of coloured diamonds that are classified as ‘pink’, but not all are created equal. The scale ranges from brownish-pink diamonds to orange-pink in tone, and even pale pink and purple-pink diamonds. When looking for a pink diamond, the reddish-pink diamonds that have a clarity rating of at least VS1 offer the best investment.
Other than insurance, pink diamonds offer an investment opportunity that requires very low cost maintenance if any at all, making it difficult to find another form of investment that requires so little effort on an ongoing basis.
It is important that when you decide to invest in a pink diamond you’re able to receive solid, reliable advice from experts who know all about pink diamonds in particular, and what makes a particular stone a worthwhile investment.
For those with money to invest, pink diamonds offer a rare opportunity to make a solid investment in something precious that will not only appreciate in value, but can also be enjoyed and admired.
With the life of the Argyle Mine coming to an end in the near future, the expected value of pink diamonds is set to climb even further. If you want an investment that you can enjoy wearing for many years to come as it grows in value, a pink diamond is an exceptional choice.
by Australian Diamond Brokers : October 9th 2015 Come visit our store or browse our website to find out more.