Certified diamonds or gold. What is more expensive on the market?
If you are looking for an opportunity to invest in precious stones – the most popular today are colored diamonds, sapphires, rubies and emeralds.
Reasons to invest in diamonds:
- A limited number of companies are involved in diamond mining in the world, which regulate the prices of stones.
- The supply of natural diamonds, according to the experts of ALROSA, will decrease by 1–2% per year for the next ten years amid growing global demand for jewellery. The gap between supply and demand in the long run may create additional pressure and lead to higher prices for polished diamonds.
- Investments in precious stones, like gold, have long-term prospects.
- Diamonds are a capital-intensive asset.
- No special registration of ownership.
- An important advantage of investing in diamonds is independence from currency and country risks.
For an investment, it is better to choose a large stone (from five carats) or a stone of a rare fancy color. When choosing, the origin and authenticity of the diamond plays a role. This is handled by certificates from respected institutions in the market – HRD (Hoge Raad voor Diamant), IGI (International Gemological Institute) and GIA (Gemological Institute of America). The ratio of 4C characteristics in a diamond, which we talked about earlier, is also important. Sometimes less valuable diamonds are purchased for a lot of money only because of the buyer’s desire to own a particular stone.
The cost of each individual diamond is determined individually due to the ambiguity and difficulty in evaluating it.
Certified diamonds can be purchased at major diamond centers in Belgium, Israel, India, the United Arab Emirates and some other countries, as well as online. The most exclusive diamonds are bought at major auction houses like Sotheby’s and Christie’s.
According to their investment attractiveness, diamonds are usually divided into rare and “ordinary” ones. The first group includes diamonds from 10 carats, of the highest characteristics (D-F \ IF-VVS2) or diamonds of rare (fancy) colors. Prices for such diamonds are growing steadily, for some items up to 50% per year.
The negative side of such dynamics is the minimum investment threshold (currently at least $ 1,000,000). The high profitability of “rare” diamonds creates the basis for speculation, and the acquisition also causes certain difficulties (search, participation in the auction). For example, diamonds over 10 carats and valued at $ 500,000 receive “premium” status and are sold only in batch sizes of $ 2 million or more. “Regular” diamonds are a fairly wide range of mid-grade stones. For the most part, they show a very modest annual growth (equal to inflation on average), which does not allow us to call them super attractive for investments, but, given the current economic situation, they are quite suitable for saving. Fortunately, you can start investing in diamonds of the second group with almost any amount.
Have a look at the most expensive rubies ever sold on auctions.