News

With just over a week to go until Xmas 2020, things are beginning to quiet down in financial markets, with most investors looking forward to a break, after what has been a year none of us will ever forget.

In late January or early February of next year, we will publish a more detailed look at the state of play in investment markets and in the economy, detailing the many reasons why pink diamonds remain an investment of choice for astute looking to sensibly balance risk and return in the years ahead.

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It was yet another record-breaking week on financial markets to start December, with equity prices climbing to yet another all-time high, even as the spread of COVID-19 in the Northern hemisphere continued to worsen, and economic data highlighted continued stagnation in the global economy.

Short-term, the sea of liquidity that is being pumped into markets could see them continue to trend higher, though with many stock markets priced at or near all-time highs, the outlook for returns in the five to ten years ahead is far less rosy, with many investors at risk of losing substantial sums of wealth.

Whilst stock markets are getting the attention, the investment case for hard assets like pink diamonds continues to build, with a number of positive developments taking place over the last few weeks.

In this market update we look at these developments, and why they support the idea of including pink diamonds in a well-diversified portfolio.

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This article originally appeared in Australian Mining December 2020. You can view the original article here, pages 22-23.

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No mine in the world has produced rare pink diamonds that can compete with the vibrancy and colour depth of those unearthed at Rio Tinto’s Argyle mine in Western Australia.

The pink diamonds found in the mines of India, Brazil and Russia also don’t compete with the character of Argyle’s famous gems.

The abundance of Argyle’s pink diamonds fit into just a small bucket in any given year, with Australian Diamond Portfolio executive director Anna Cisecki saying they represent only one of every 10,000 gem-quality diamonds produced at the mine.

Further, they represent less than 1 per cent of the world’s supply of diamonds, putting them in a much-elevated position to yellow diamonds that comprise around 60 per cent of the fancy-colour diamond market.

This scarcity has given pink diamonds inflation protecting qualities and steadily increased their prices by 11 per cent in the past 15 years, outperforming the Australian Securities Exchange, which returned 7.9 per cent.

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As we head toward Xmas 2020, markets are on a tear, with the value of stock markets around the globe fast approaching USD $100 trillion. They rose in value by a further USD $2.1 trillion in the last week alone, with global equity markets up by 13% in November, their best month ever.
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Stock markets are moving higher, with the Dow Jones climbing above 30,000 points for the first time ever overnight. Optimism regarding the outlook for the global economy in 2021 continues to build, as this week we saw the announcement that yet another company has come up with promising results regarding a vaccine for COVID-19.

This time around it was drug maker AstraZeneca, who in conjunction with Oxford University released the news that their vaccine was up to 90% effective. Whilst that isn’t quite as high as the vaccines being developed by Moderna and Pfizer, the Oxford/AstraZeneca vaccine does appear to have two distinct advantages over its competitors.
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It’s safe to say that it has been an eventful year in 2020, with November itself delivering plenty of news in terms of COVID-19 vaccines, the US Presidential Election, and of course, the permanent closure of the Argyle Diamond Mine.

In this week’s market update, we look at the good and bad news regarding COVID-19, and why the economic fallout from efforts to limit the spread of the disease reinforces many of the reasons astute investors are turning to pink diamonds.

We also look forward to Christmas 2020, with a reminder about our recently launched Legacy Collection of pink diamonds, which will make the perfect gift this year.
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