News

It’s just over a month until Christmas 2021.

So far this year has been very rewarding for investors, with share prices, property prices, cryptocurrencies and commodities all rising, though few if any have matched the stellar returns, and the stability, that pink diamonds have offered.

In this week’s market update we touch on a couple of factors for investors to consider as we head into the new year, which reinforce why we remain confident that the market leading returns pink diamonds have offered will continue.

What will happen to markets in 2022?

The end of any year is a great time to take stock of our investment portfolio, as well as cast our minds forward, so we can assess the risks and opportunities available in the markets as we head into 2022.

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It’s been another interesting week in financial markets, with US inflation rates coming in at more than 6% per annum, consumer confidence in the world’s largest economy beginning to crumble, and some volatility starting to creep into equity markets.

Despite this, investors remain optimistic – with allocations to risky assets at all-time highs.

In this week’s market update we look at three non-diamond specific factors that all contribute to why we remain so bullish on the outlook for pink diamonds and discuss why buying physical pink diamonds themselves is the safest way to get exposure to this asset class.

See more below.

Three charts that have us bullish on pink diamonds

Regular readers of our In the Loupe series know that our view on pink diamonds, and why we think they will continue to provide market leading investment results, is driven both by the factors unique to diamonds (scarcity, beauty, tangibility), as well as other factors that relate to markets.

Below – we want to touch on three market related matters that reinforce our bullish outlook for pink diamonds.

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It’s hard to believe, but we are only several weeks away from Christmas 2021.

And with Australia largely (though not yet fully) beginning to reopen, we are sure many of our clients at Australian Diamond Portfolio are looking forward to long overdue family and friend catch ups, and a chance to recharge our batteries as we head into 2022.

In this week’s market update, we take a look at some of the latest news on the inflation front, with higher inflation a key tailwind supporting higher demand for pink diamonds.

We also touch on the latest media articles discussing the pink diamond market, which are all helping to stimulate further interest from astute investors looking to diversify their portfolio, and profit from one of the fastest growing assets on the market.

Inflationary spikes to boost pink diamonds

As a truly rare hard asset, pink diamonds are one of the best potential hedges against rising inflation, with a history of not only holding, but increasing in value whenever the money we earn and save is losing its value.

And make no mistake, after two decades in which inflation rates were (mostly) quite low, and trending down, inflation is once again a front of mind issue, with annual price increases of more than 5% in the United States right now.

This can be seen in the below chart, which shows the year on year changes in the official inflation rate over the past sixty years.

Inflation Rate

Source: Federal Reserve, BLS

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It’s been a huge week in the pink diamond market, with a number of positive developments highlighting how strong the price rise in these diamonds has been over the past twelve months, and why this bull market is just getting started.

Below we look at these developments in detail, including the results from the last ever Pink Diamond Tender from the Argyle Mine, the release of our very own pink diamond index, and the wall to wall media coverage that has accompanied it.

Final Pink Diamond Tender results released from Argyle!

For months, the market has eagerly awaited the results of the last ever Pink Diamond Tender.

Dating back more than 30 years, the Tender is the highlight of the year on the pink diamond calendar as it were, with the diamonds sold via the Tender the absolute crème de la crème.

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Given the year it’s been, it’s beginning to look like Australia will almost fully be back to normal in terms of people movements in time for Christmas, with Victoria beginning to open up from COVID-19 related lockdowns, and even Queensland announcing a path out of the restrictions they currently have imposed.

And while that means many of us are no doubt looking forward to interstate flights, trips to see family and friends, or even just a simple restaurant meal, we will all still need to keep an eye on our portfolios, with the latest data around the world suggesting inflation rates are continuing to creep higher, while some volatility is starting to creep back into financial markets.

To that end, we came across a great article last week that ultimately dealt with investor psychology, and some of the pitfalls that come with managing your money in volatile markets.

From our perspective, this article, and the studies it quotes, reinforce why pink diamonds can make such great investments for long-term wealth builders today.

We explain in more detail below.

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While it seems there is nothing but bad news when it comes to COVID-19 that gets any media attention, I for one am hopeful that this week marks a turning point of sorts for Australia, with New South Wales beginning a return (however slowly) to what might be termed normal.

We are certainly looking forward to being able to welcome clients of Australian Diamond Portfolio back to our offices in Sydney, as well as re-open our doors as it were to potential investors who may wish to learn more about the incredible investment opportunity pink diamonds offer today.

To that end, in this week’s market update, we look at an incredible news story that is gaining attention in the United States that highlights the very real risk that we see much higher inflation in the years ahead, and why this supports the investment case for pink diamonds.

We also touch on the just completed, last ever ‘Argyle Pink Diamond Tender’, the results from which we expect to hear about in the media within the next few weeks.

A mockup of what a trillion dollar coin might look like. Credit: DonkeyHotey via Flickr.

One platinum coin, one trillion reasons to buy pink diamonds

In the United States, the government owes 28.8 trillion dollars to households, businesses and other governments, an amount equal to $228,000 for each and every American taxpayer.

As a share of economic output, the government debt to GDP ratio is over 125%, having risen from just 56% in the year 2000.

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14Be it the uncertainty in markets, or the continued challenge posed by COVID-19 and the associated lockdowns, times like this make me very happy that I work in the pink diamond industry, given as an asset class they are truly rare, beautiful, and have a history of protecting wealth and outperforming other assets.

These views, and why it makes so much sense to be a pink diamond investor today were only reinforced by a great write up in the ABC late last week, which focused on the pink diamond market, and the finalisation of the last ever Argyle Pink Diamonds Signature Tender.

We look into that in more detail below.

An Argyle ‘Signature Tender’ pink diamond from the 2019 Tender.

Raise a glass to Argyle Pink Diamonds

As we’ve been saying for the better part of a year now, the closure of the Argyle Diamond mine would kickstart a wave of media coverage, with this extra attention helping to propel the surge in prices that saw pink diamonds return 30% on average in the last financial year.

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