Investment Grade Diamonds

What are Investment Grade Diamonds?

An Investment Grade Diamond represents approximately 1-2% of the diamond market and is typified as a flawless stone and coloured. The quality can vary but never less than VVS2 providing the colour, clarity, cut and size are outstanding to exceptional. In general colour is the main consideration and can be at the expense of quality.

Rarity of Investment Grade ‘Fancy’ Coloured Diamonds

Coloured diamonds are truly rare: For every 10,000 carats of diamonds that are cut, a mere one-carat may possess fancy colours. A purplish-pink diamond from the Argyle mine in Australia may, literally, be a one-in-a-million proposition. This is among the reasons their prices have never gone down at the dealer level during the past thirty years. In fact, prices for the finest quality coloured diamonds have increased in value by an average of between 15-25% per year, which means that some have, on average, doubled in price every 5 years at the dealer level. The rise in value has not been in a straight line: There have been pauses, during which prices were static or barely increasing in times of economic contractions. But except for these short pauses, prices of coloured diamonds have gone in only one direction – upwards. In contrast to the uncertain and wavering values of stocks, real estate and other assets, the downside financial risk from owning a coloured diamond is minimal and has existed only during very short periods, the potential upside is exceptional. There is an additional bonus for sophisticated investors and collectors who experience enchantment from the ownership of beautiful works of art, in this case, nature’s works of art.

Owning a coloured diamond has become a mark of prestige as well as sophistication. It is very difficult today to read an up market magazine without seeing two or three advertisements featuring coloured diamond jewellery.

Ownership of a fine coloured diamond is now, more than ever, within the reach of people of relatively modest means as well as connoisseurs and collectors. Multi-carat stones of pink, blue, yellow and green worth millions of dollars each may still change hands behind the velvet curtains of high society’s auction rooms, but within the past decade a different and much larger market has emerged outside these sanctums, where coloured diamonds, of all sizes and all colours are regularly bought and sold. Few people pause to realise that the world’s most celebrated diamonds are coloured diamonds.