In recent years, increasing attention has been focused on purchasing diamonds for investment. Diamonds offer many advantages to investors:A hard asset that can hedge against inflation and the de-valuation of paper money. Low correlation to other asset classes and almost zero correlation to equities. Stable long-term returns and much lower volatility than traditional asset classes.
Potential for substantial long-term returns due to a supply-demand imbalance. Color diamonds as an investment in particular, offer an incredible opportunity to profit over the long term as the
supply-demand balance is more acute than in the white diamond market. Supply is exceedingly tight and likely to get tighter. Only 1 in 10,000 carats mined are fancy color, so very little new supply enters the market each year. Looking forward, many of the major mines producing fancy color diamonds are near the end of their productive lives, so supplies will become more restricted in the future. At the same time, demand for color diamonds among the wealthy, collectors and investors – is far outstripping the supply. Color diamonds offer the potential for truly tremendous
gains for the astute purchaser. As a result, color diamond sales at auction continue to make not just headlines, but to break record after record. Below are just a few of the most recent record
breaking prices paid for color diamonds at auction.
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