Why invest in diamonds now?

  • Popularity of diamonds
  • Raw or polished diamonds
  • Natural Fancy Coloured diamonds
  • Investing in diamonds, where to start?

Shares and obligations have always been a popular way to invest your money. But even though shares and obligations are still profitable, as opposed to savings plans for example, it is still worthwhile to consider investing in diamonds. The advantages are plenty. They are small. They can be worn and their value increases in the meantime. They are also durable, require no storage costs and next to no maintenance. 

Diamond’s popularity

The increasing popularity of diamonds can be attributed to De Beers. When this company started, the market for diamonds was saturated. With effective marketing campaigns, De Beers succeeded in convincing the general public that a diamond ring was only truly priceless if a diamond was incorporated in the design. Before these marketing campaigns, diamond rings constituted for only 10% of all the engagement rings. In 1941 diamond sales increased with 55% and in 1943 De Beers launched to legendary slogan “Diamonds are forever”. This sentence encompasses both the physical and emotional value of a diamond and it proved very effective in impacting the entire diamond industry. Today, a diamond engagement ring has become the norm.

Investing in diamonds, raw or polished

A raw diamond is more affordable than a polished diamond, this is true. A raw diamond that has been purchased in a correct way has the potential to be very profitable, but also comes with higher risks. When assessing a raw diamond, it is difficult to correctly determine its possible quality and value. A high level of experience is required, too, for working out the clarity and colour of a raw diamond. Also, raw diamonds lose about half their carat weight during the cutting process. Polished diamonds, on the other hand, are easy to assess and don’t run the risk of losing carat weight. So unless you are a diamond expert or you are aspiring to build a raw diamond portfolio, it is better and safer to invest in polished diamonds.  

Natural Fancy Coloured Diamonds

Loose white diamonds with a carat weight of less than 2 carat is relatively easy to acquire. Some fancy colours, however, are becoming rarer and rarer. For example, it is expected that the Argyle mine is Australia, the biggest natural pink diamond mine, will close down in 2018. As a result, pink diamonds will become rarer and the people who invest in these kinds of diamonds will see its profitability rise. Furthermore, for every 10.000 carat white diamonds, only 1 carat coloured diamonds are mined, of which only 1% has the correct qualities to make it an investment product.

Throughout history, coloured diamonds have always had a higher value compared to other investment products. In 2008, for example, the value of gold decreased with 30%, while the value of natural fancy colour diamonds increased with 4%.

Investing in diamonds, where to start?

For more information regarding investing in diamonds, you can read the following articles:

If you would like to learn more about the options for investing in diamonds, BAUNAT DIAMONDS is here to help you.

Author: San Meuleman

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