A Guide to Investing in a Diamond Portfolio of Pink Diamonds

Although pink diamonds are a rare gem, their popularity has grown over the years because of their striking colour and elegance. Interestingly, 90% of the world’s pink diamonds comes from Western Australia’s Argyle mines, while the rest of the valuable element comes from Canada, Brazil, South Africa, Tanzania, and Siberia. However, you can get only about three pink diamonds from three tons of diamond processed. The shockingly high rarity of the pink diamond, make it a valuable jewel for investment when compared to your ordinary diamond. 

If you are a seasoned investor, you want to make the best out of your investment. However, you need to know more about the investment options, including a pink diamond, before committing your money and time. Otherwise, your failure in the business will not be a unique one. If you are planning to invest in a pink diamond, here are some of the things you need to know before jumping into the investment fully.

Benefits of investing in pink diamonds

Benefits of investing in pink diamonds

Today, the global economic landscape is volatile, with the current challenges such as the Covid-19 pandemic and political factors contributing to the uncertainty. Therefore, you will need to invest in an alternative asset that can protect you from the market crisis and provide reliable returns. Investing in a diamond portfolio sets you on a path to potential gain. Investing in a pink diamond is fancier than the standard diamond for several reasons, including; 

Attractive capital appreciation

The main reason that makes a pink diamond a popular investment option is its long-term capital gain history. People who have invested in this unique jewellery have reaped significantly from the appreciation of their investment in recent years. The value of pink diamonds (of all categories) has appreciated by about 10-15% per annum in the last 15 years (2005-2020). A pink diamonds’ performance in the market has also been above the traditional mineral investment assets, such as silver and international shares. The increased demand for the pink diamond is a strong indication that it will continue to perform in the coming years.

Relatively stable in the market

Let’s face it; the market is currently volatile, mainly because of factors beyond control, such as the global pandemic. But, the pink diamond’s performance in the market has been consistent and stable, making it an essential asset for investors. The prices for the various categories of a pink diamond have increased by 10-12% per annum in the last 15 years. Diamond prices show significant appreciation during the bullish period and remain relatively stable during an economic crisis, such as a recession. If you are a serious investor building a diversified portfolio, this appreciation and stability will be an essential consideration. 

Even though speculations in the equity market lead to fluctuation in most assets’ prices, a pink diamond is rarely affected, making it less volatile. The jewellery is also insulated from volatility because it is a scarce resource with limited supply in the future. 

Pink Diamonds are attractive investment alternative to cash.

Although most investment portfolios are cash-based, the return on investment is usually low. Australia’s interest rate is as low as 0.5%, especially now that the Australian economy is on a slow-growth projector. The pink diamond is an attractive investment alternative to cash and other traditional assets. Thus, your financial advisor will most likely advise you to look into the hard asset if you want to grow your wealth. 

Process of investing in Pink Diamonds

Process of investing in Pink Diamonds

A pure, high-grade pink diamond is highly marketable. However, this precious asset is scarce, making it a risky investment option. The market may be flooded with scammers and fake diamonds because of its rarity, further making it a risky commodity. Therefore, you need to make your investment secure if you are considering pink diamonds. So, what do you need to do to invest safely?

Know the commodity

Not all diamonds are investment diamonds (diamonds that grow in value over time). Some diamonds are best as gifts. The most common asset diamonds are coloured ones, like pink diamonds. Therefore, you need to have adequate knowledge of the commodity or asset and in the area of investing in it. With this, you will be in a great position to make the right decisions. Before you venture into an investment, you need to familiarise with the terms used by the vender, auction houses, and gemmologist. Understand the four Cs of a diamond (color intensity, carat weight, clarity grading, and cut) and how they contribute to the commodity’s overall value.

Choose the right dealer.

Now that you understand the commodity and its investment, the next thing you need to do is choosing the right dealer. The right dealer will guide you on how to choose the right high-quality diamond and your investment secure. Also, a dealer guides you on when and how to sell your pink diamond. Diamonds are a highly valued investment. So, you shouldn’t settle for just any dealer. Therefore, it is highly recommended that you choose a licensed and certified dealer. Alternatively, buy GIA certified diamonds, which ensures that your investment is secure. 

Vary your portfolio

Due to the value and possible high returns from pink diamond investment, you may be enticed to commit all your budget to just one category or class of the asset. However, it would be best if you varied your portfolio by investing in different categories. For instance, you can consider investing in fancy pink, fancy intense pink, and fancy vivid pink instead of just one color. Portfolio variation offers both investment flexibility and security, especially during low prices.

Know when to sell your pink diamond

One of the top questions investors ask before venturing into diamond investment is how and when to sell their assets. The truth is that it will take you time to get a buyer for your pink diamond since there is no one centralised market for the commodity. So, when you want to dispose of your diamond, start the process a few months before when you will need the money. This will enable you or your dealer to find the right market or buyer for the stone. Remember, you can sell the stone directly to a buyer, or a dealer/broker can do it on your behalf. Alternatively, you can sell your pink diamond through an auction house. 

Conclusion

Pink diamonds are a profitable venture and there are several diamond brokers you can consider for your investment. Argyle Diamond Investments Pty Ltd is one of the independent investment brokerages that provides end-to-end solution to pink diamond investment. They will take you through the process of buying, storing, and eventual sale of your diamond, guiding you every step of the way. Don’t hesitate, contact them today and make your pink diamond investment dreams come true.

Argyle Diamond Investments Pty Ltd are Australia’s largest supplier of Australian certified pink diamonds and have exclusive use of the Australian Pink Diamond Analytics program. This program is a data driven decision maker that tracks and statistically analyses the rarity, financial growth and value of all investment grade pink and blue diamonds. With this valuable information, Argyle Diamond Investments Pty Ltd can offer all clients an investment grade pink from $5,000AUD up. But, the highest growth diamonds, are the larger, stronger colour pinks starting from around $20,000AUD plus.

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The Essential Guide To Buying A Pink Diamond

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