While diamonds may be a girl’s best friend, pink diamonds now do it for investors. Times may be tough but in the world of pink diamonds, business is booming.
Pink diamonds have shown the greatest growth in value, up by 360% in the last nine years. Crucially, both pink and blue diamonds were unaffected by the global financial crisis with pinks still increasing through 2008 to 2010.
The best-known pink diamonds are from the Argyle diamond mine in Western Australia. That mine, which supplies 90 to 95 percent of the world’s pink diamonds, will be exhausted by 2021, and the scarcity has driven up prices. Argyle pink diamonds outperform any other, they’re less and less available and more and more in demand.
The reasons range from the rarity of the stones, especially the colored varieties, to the desire of wealthy investors to diversify their portfolios with tangible assets as a hedge against volatile equity markets. A diamond can also be a discreet way to put a tremendous amount of money into something smaller than an aspirin tablet.
Buying a pink diamond is like buying a painting by Pablo Picasso while he was alive. You know at some point they will run out and increase in value.
We have always known it was a limited source and that a time would come when this fabulous fluke of nature would end, but there is a lack of appreciation for what this will mean. In another decade the Argyle Pink Diamond will emerge as the new Faberge egg, the thing myths are made of. The value of rarity is the most priceless factor.
Individuals across the globe are ploughing millions into rare coloured diamonds as a stable, ‘safe haven’ asset class. People are loving them as an alternative investment. It is a tangible, moveable asset, so you can carry your wealth in your pocket or on your finger.
There are a couple of different sorts of potential buyers, one is the person who is looking at a different asset class for investment because they have enough shares or gold, and it can also be someone who is multi-purposed, they might want all of that and a jewel that they can wear so they can get some pleasure out of it.
The Australian-produced pink stones have become highly sought after by investors of all stripes, led by the rise in self-managed super funds…[with] a growing trend towards self-managed super funds following the GFC, [it’s not] just the super rich putting in bids for the stones.
The popularity and price of fancy colored diamonds have been on the rise globally, driven by Asian investors…The market is getting a lot more educated and global – and it’s not just the traditional elites that are collecting but the savvy investors as well.