There was a time, not so long ago, when what are known as alternative investments were really only the domain of institutional and very high net worth investors. However, with traditional investments once again becoming volatile – and not in a good way – all over the world, alternative investments, not just in gold and silver but also in art, diamonds, and even fine wines are finding their way into individual ‘retail’ portfolios as well.
One form of alternative investment – colored diamonds – is particularly attractive to a growing of retail – or individual – investors and according to a number of financial experts that popularity is well-founded, as the outlook for colored diamond investment is bright.
Why Choose to Colored Diamonds to a Private Portfolio?
One of the biggest advantages of alternative investments like colored diamonds is that they are not tied to the performance of the stock market and so add diversity to an overall personal investment portfolio that 21st century financial advisors recommend almost across the board. They are also, of course, a physical asset that can be held (literally) and will not lose their value quickly, as is the case in some of the current bond markets, which are once again seeing a significant slowdown in 2019.
There is also the fact that the fancy colored diamond market is never likely to become in anyway oversaturated. Although they may be more recognizable to the average jewelry aficionado now, thanks in part to their popularity with certain very visible celebrities, they are all still extremely rare, and the known supply of certain colors is decreasing rather than increasing. But which colors of diamonds are those?
Which Colors of Diamonds Offer the Best Investment Opportunities?
As of 2018, the last year for which a large body of statistics is available, overall the value of fancy colored diamonds grew 0.4% over the year before, but there is one hue of diamond that continues to outperform others; blue diamonds.
Fancy vivid blue diamonds, which are blue colored diamonds of the highest quality – the scale runs Fancy Light, Fancy, Fancy Intense and Fancy Vivid – rose in value by over 8% – 8.5% according to the Fancy Color Research Foundation, an Israeli diamond market information provider considered an authority on the subject.
Blue is not the only colored diamond ‘on the rise’ in terms of value this year though. Yellow diamonds increased 1.6% in value in the last quarter of 2018 and that rise is expected to continue.
The Pink Diamond – A Color on the Rise?
The pink diamond – one that is certainly a big favorite with collectors and even with those purchasing high end jewelry purely for the purpose of wearing diamonds – has lagged behind some of the other fancy colored diamonds in the past but that is all likely to change in the coming years.
Pink diamonds are primarily mined from a single location – the Argyle Mines in Australia – and, as a result of the near exhaustion of the diamond supply in the mine as a whole it is scheduled to cease operations and close altogether in 2020. This will mean that pink diamonds will become even more scarce than they are right now and an increase in their value is likely to be the result.
As is the case for any investment, including any alternative investment education and an ability to remain risk tolerant are significant keys to success. The importance of education – and of obtaining sound advice about the quality of the diamonds themselves and the best ways in which to leverage their value as a part of an overall investment strategy is hard to overstate.