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Why Invest in diamonds

by Sidsel Dalby
INVESTMENT DIAMONDS

Diamonds are non-monetary, highly-portable assets.
   – Forbes Magazine

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Diamonds have throughout history been used as a medium of capital preservation, wealth accumulation, as well as a hedge against financial and political crisis as we experience right now with increased interest rates and the ongoing conflict between Russia and Ukraine.

Latest data from Bain & Co (Global Trade index – LIPI) supports the macrotrend on diamonds as an attractive alternative investment asset class. Based on their attractive performance characteristics with;

  • Attractive returns – good historical performance with expected solid future price increases (driven by excess demand)
  • Low volatility and low correlation (polished diamonds) to main asset classes (inflation hedge characteristics)

LIPI Trade Index

As the investment community and proficient investors demand for alternative investments is growing more than ever, especially fancy color diamonds and larger white diamonds may be the last tapped natural resource to turn into a broader financial instrument.

Why Invest in diamonds?

  • Diamonds are the best assets to have in case of life changes, or even emergencies. Diamonds can easily be carried on your person, wherever and whenever you may need to go. During the long history of diamonds they have served people as one of the only ways to transport wealth long distances and/or across borders.
  • Diamonds are suitable for wealth preservation – help to diversify a private portfolio.
  • Diamonds will provide the owner with additional enjoyment and value, besides the monetary gains of the investment.
  • Diamonds can be inherited by family members.
  • Pink diamonds are described as the preferred high-end investment in 2020 by The Telegraph
  • 112% appreciation on fancy colored diamonds over the last 10 years.
  • Blue diamonds have performed strongly over the last couple of years with some sizes rising in value by almost 12% annually.
  • Pink diamonds have increased more than 400% in value since 2000.
(data by The Knight Frank Luxury Investment Index & The Fancy Color Research Foundation).
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The Closure Of The Argyle Mine

It has been almost a year since the Australian Argyle Mine closed down. This closure did not go unnoticed by the world press, as Argyle produced more than 90% of the already extremely rare colored diamonds.

The Argyle mine closed on November 3rd, 2020. Not surprisingly, as a direct result in the year that has passed, we have experienced a steep increase in global interest for the rare and colored diamonds.  Surely we agree that all diamonds are unique and beautiful, yet only few are categorized as investment diamonds.  More than ever, we cannot stress enough how relevant is is to strategically focus on especially the blue, pink, and yellow diamonds as investment pieces or as part of statement jewelry, as they represent an extremely rare ressource and are bound to continuously rise in value.

Market trends

Diamonds as investment class is evolving beyond its traditional ability to preserve, relocate and pass on wealth due to macroeconomics, a gap in supply/demand set to widen due to the closure of The Argyle Mine in 2020 – the world’s largest source on rare fancy color diamonds. It is estimated that pink diamonds constitute a minuscule fraction of about 0.0001% of all diamonds marketed annually by Argyle.

Investments in especially rare fancy colored diamonds are destined to increase considerably overtime so if you are looking for additional safe havens to place your money, diamonds can add sparkle to your portfolio. While gold and silver fluctuate in the market, more investors are purchasing diamonds as a way to counteract impending inflation. Learning how to acquire diamonds can help you expand the diversification of your assets.

Invest with DALBY DIAMONDS trading platform

DALBY DIAMONDS specializes in alternative investment in colorless and fancy color diamonds and precious gemstones (rubies, sapphires and emeralds) with strategic access to the supply chain and control of off-market reservoirs. The direct access from mine to market means that DALBY DIAMONDS as provider of investment grade diamonds is capable of offering the best prices on diamonds and gemstones in the market. DALBY DIAMONDS exclusively select diamonds that are natural mined and conflict-free with GIA-certificates.

The principal of the company, Sidsel Dalby Glerup, is the founder and owner of DALBY DIAMONDS – Scandinavian Diamond Exchange – with a proven track record from the diamond industry as broker and gemologist from The Gemological Institute of America (GIA). Sidsel also has a background from commodity trading in precious metals including gold and silver.

DALBY DIAMONDS are forming a platform open to the financial community and private sector where investors are able to buy and sell diamonds.

Your trusted source for diamond investment

DALBY DIAMONDS procure the diamonds for the investor as a physical asset. At the time of liquidation, the investor may give mandate to DALBY DIAMONDS to sell the diamonds to achieve the most advantageous exit from the investment. The intent of this structure is to enable the investor to timely liquidate the asset at an attractive market price.

DALBY DIAMONDS are operating with a transparent pricing policy with no extra retail margin adding to the price and no hidden fees.

Choosing the right diamond for investment is a skilled job. It is our recommendation that clients interested in investment grade diamonds consider color, clarity, cut and carat together with a budget before they contact us for further assistance or a diamond price quote.

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Investment Grade diamonds

There are two main diamond categories investors are taking note of in particular: highend diamonds and “bread and butter” white goods:

  • The first category is comprised of fancy color diamonds, mainly those with VS clarities and better, preferably with at least a “Fancy” color grading. Fancy color diamonds that have only one color without a secondary color (pink vs purplish pink, for example) are preferred. This category also includes white diamonds larger than 4.00 carats, with a DEF color and FL/IF-VVS clarity. This category is not a new venue for investment. However, with the growing understanding of the potential diamonds have as an investment venue, more people are interested in investing than ever before.
  • The second category of goods is often referred to as “standard,” “ABC” or “bread and butter” goods. Broadly defined, these goods consist of 1-5 carat, D-J color, IFSI1, round GIA certified diamonds. Some investment companies and private persons are also looking at a broader range of size, ranging from 0.50 carat.

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