Novel Collection diamonds investing and industry news
2012 was a challenging year for diamond traders in general, with the economic uncertainties in the U.S. and Europe, but the outlook for Fancy Colored Diamonds remained stable and predictable. The diamond pipeline which chains out, as:
• $15 billion in rough diamonds
• Becoming $24 billion in polished diamonds,
• Which in turn goes into diamond jewelry with a resulting retail value of $71 billion,
The diamond industry was stabilized globally by the increasing demand drive of China and India. Sales indicated that this year may be the beginning of the “diamond decade”, where increasing demands will be coupled with a dwindling supply driving the market prices up even further. Fancy colored diamonds, white diamonds and diamond jewelry at Sotheby’s, topped at a Record $460.5 Million for 2012 in Sales, including a rare fancy deep blue 10.48 carat diamond which sold for $10.8 million. Fancy Colored Diamonds are increasingly being sought after as a “safe haven” of “stealth wealth” for several reasons:
• Immune from any market fluctuations
• Or government intrusion
• Or registration, serial number, patent, etc.
• With an upside of being personal and portable,
• A significant addition to a portfolio providing balance and stability
• A secure hedge against inflation
• Having a stable ROI.
The return on colored diamonds is much higher than any other investment on the market today. Diamonds have successfully weathered recessions and colored diamonds in particular have proven to be a uniquely strong investment. Though many large colored diamond pieces can be worth hundreds of thousands, to even millions of dollars each, there are smaller stones which are worthy of investment as well. FCD is a stable, resilient and the most secure safe haven in investment today. In 2011 – Diamonds outperformed oil, gold and real estate investment. The global demand for diamonds will probably outstrip supply by 7 million carats by 2016. It follows that IF (Internally flawless) white diamonds, which normally are not typical invest grade also go up in price, Fancy color diamonds, the crown of the diamond investment world, will certainly rise in value.
Some Key fancy color diamonds investment Facts
• In the last 12 years, FCDs outperformed the stock market and have never decreased in price at the wholesale level for 35 years.
• FCDs are relatively recession proof – they were not affected by the Lehman Brothers bankruptcies, such as real estate investments which lost up to 50% of their portfolio.
• According to Rapaport’s “Diamond Price Statistics Annual Report” – a decade-long diamond investment outpaced returns in the yen, Euro, and Nasdaq or Dow Jones indices.
• Many of the world’s largest diamond mines are reaching the end of their life cycle. BHP Billiton and Rio Tinto are divesting their mines due to decreasing production. Supply dwindling and Demand Swelling = strong FCD Investment.
• Diamonds as a hard asset more than doubled gold’s returns for 2011. FCD’s do not carry price violatility because there is an absence of large flows of speculative money.
Because they are the rarest of diamonds they are increasingly becoming an investment choice, due to rising demand and diminishing supply. White diamonds lost value while fancy color diamonds gained value especially the rarer colors – high intensity yellows, pink, blue and green. In addition, there is more demand for unique looks in personal style and fashion and so we can see with the interest and sales of other gems such as: Emeralds, Rubies and Sapphires which are becoming much more popular lately.
All forecasts project an increasing demand from China and India which are adopting western cultural practices of diamond personal possession as well as in gift-giving for social and relationship occasions, such as engagements, weddings, and anniversaries. Revenues from diamond sales are expected to increase from $185 billion in 2010 to $230 billion (USD) in 2015 due to surge in demand from India and China.
Both countries have surged economies that have produced a rising middle class of high demand with significant sales. Growing demand especially from ramping China and India, with looming shortages from mines, indicates that prices will continue to rise for investment quality FCD. 2013 most likely will continue in these directions, making fancy colored diamonds an excellent choice, not only in matters of the heart, but of the pocket as a strong investment.
You can read more about diamond investment news and coverage in our diamond investment section.
We also want to remind you that we are participating in the upcoming Hong-Kong jewelry show that will take place at the HK convention center, between 5th to the 9th of March. You are welcome to join us.