A Vibrant Investment in Fancy Colored Diamonds

Part 1

Due to their rarity and unique market, the prices of fancy color diamonds have not gone down during the past thirty years at the dealer level. On the contrary, prices for the finest quality colored diamonds have increased in value by an average of between 10%-15% per year. This means that some have, on average, doubled in price every 5 years. The rise in value has not been a straight upward line on the graph – there have been breaks in the pattern, during which prices were static or barely increasing in times of economic difficulties. But except for these short pauses, the price of colored diamonds has gone in only one direction – upwards.

Owning a colored diamond has also become a mark of sophistication. It is very common today to see two or three advertisements featuring colored diamond jewelry in any up-market magazine you choose to open.

 

Moreover, fancy colored diamonds are breaking records around the world at all the major auction houses such as Christies and Sotheby’s. These current high records have even broken the long standing record of the “Hancock Red” that was the highest sale per carat at the time. The Hancock Red – a 0.95-carat, round brilliant Red diamond made news when it was sold at Christie’s in 1987 for $880,000.

All this translates into one conclusion – fancy colored diamonds are a great investment. Whether you are a serious diamantier or just like diamonds, there are a few ways to invest in fancy color diamonds. It all depends on your budget and a good knowledge of the market. Here are some pointers to guide you in the right direction for successful investment:

1. Single stone – Investing in a single fancy color diamond is the safest choice. Choosing a diamond color with high rarity, mostly Red, Blue, Pink or Green that has good color characteristics (strong intensity of color), larger than 0.5 Ct in weight, is a great long-term investment.

2. Collection of stones – Some prefer to collect a set of fancy color diamonds, usually stones of the same color but with different tones and saturation which provides a range of shades. You can also form a collection of a few colors. These types of sets will have a high value in the future due to the fact that rarity is a key element here and forming such a collection maytake a few years to form.

3. Unique estate jewelry – A market that can be the most lucrative but demands more knowledge, is the vintage fancy color diamond jewelry. Each piece is mostly one of a kind and therefore unique and resalable. One will need to learn the market or to consult with a professional, but when finding the right item it will be probably a very good future investment.

 

A good investor will check the prices, and see what vendors are offering. You also need to decide what color you wish to invest in, and how much money you want to spend.

It is very important to know that diamonds are not like the stock market – even if you want to sell, it can sometimes take some time. And yet if you have a good rare stone, with good color and make which the vendor has explained why in his opinion the stone is a good investment, you are most likely to gain a nice margin.

Here is a example of a good, sound investment: 

experts believe that the Argyle Mine in Western Australia will stop producing Pink diamonds in approximately 18 years. That doesn’t mean that women will stop wanting Pink diamonds any more in 18 years time. 

They will still seek them, but the price will be much higher since the only trade of these diamonds will be among existing diamonds.

So, if you are a person who likes quick and easy money, the stock market is the place for you. But if you are a true connoisseur and a relaxed investor, willing to wait for the right opportunity, fancy colored diamonds are the right sort of investment

A complete diamonds investing guide can found here.