Despite the ongoing threat to the economy and to financial markets from COVID-19, and the impact that it is having on our daily lives, opportunities to grow your wealth still exist in the investment world today.
In the coloured diamond space, we are still seeing strong demand for high quality stones, with auctions in Hong Kong this week seeing some coloured diamonds selling at a 30% premium relative to their pre-auction highest estimates.
That is a show of strength, highlighting the fact that investment demand for high quality coloured diamonds remains as strong as ever.
It is our belief that these already strong levels of investment demand will only grow in the years to come, as we explain in detail below.
Why You Need To Diversify
This week we came across another illustration of why investors need to diversify their wealth, and why tangible assets like pink diamonds offer a unique opportunity for wealth protection and growth in the years ahead.
That illustration can be seen in the chart below, which comes from popular Australian finance and investing blog MacroBusiness.
The chart looks at the performance of the Australian dollar vs. the US dollar (pink line), and the performance of the S&P 500 (black line) equity market in the United States from early February to early July 2020.
In the chart, both the currency performance and the stock market index have been rebased to 100 for ease of comparison.
AUD vs SPX index
Note how correlated they are.
Whilst equities were plunging during late February and late March, so too was the Australian dollar. If you are an Australian investor and had money in the share market during this period, then it wasn’t just your stock portfolio that got hit.