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The Coronavirus outbreak has presented governments, business owners, and the rest of us for that matter, with a very significant dilemma…Do we open up the economy but risk the health of the public, or do we keep everything closed and risk the health of the economy?

There is no definitive “correct” answer.  The reality is that upwards of 40 million Americans have filed for unemployment, and global economies have not fared much better, but markets are trying to take small steps to cautiously reopen in an attempt to start “saving” the economy. Even in this case however, things will not go back to normal instantly, especially for industries reliant on travel.

But what if we don’t fully reopen or if it takes a long time to open? Does the government continue to pay the hard-hit individuals, ultimately leading to inflation concerns?

If the above doesn’t occur and the economy is still not fully reopened, how do the hardest hit pay their bills? Does this create a long-term contentious and fractious economy filled with uncertainty?

These are without a doubt really difficult choices and there will be winners and losers in each situation. Regardless of the decision taken, the economy will be in a state of flux and uncertainty, so what might you consider doing? How do you proceed with protecting your wealth?

Let’s consider 3 choices:

1) Keep your money in the stock market and navigate tumultuous waters

2) Pull all your money out of stocks, and move to cash, but then risk inflation

3) Find a safe-haven during these difficult economic times and ride out the storm

The most appealing choice to many will be number 3, but where do such safe-havens exist and how can you find them?

The Best Lessons are Learned from History

The most recent instance of true financial turmoil was a little over a decade ago, when we experienced the 2008 financial crisis followed by a multi-year recession. Those who kept their money in stocks were hit the hardest, and took about 6 years to fully recover.  However, investors that decided to go another route; the route of alternative asset investing, experienced remarkable gains during that same period!

Treasure assets such as precious metals, classic cars, vintage watches, and art were go-to’s for many investors back then but there was another emerging asset that was unaffected by the state of the economy; diamonds. Investing in diamonds, especially colored diamonds. With more and more investors educating themselves, they were able to leverage their investments in colored diamonds to not only act as a safe-haven for their wealth but also for appreciation too. 

As we can see from the graph above, colored diamonds, and in particular pink diamonds, saw a significant increase as investors turned to treasure assets to diversify and strengthen their portfolios.

But Why Pink Diamonds in Particular?

The growing interest in Pink diamonds during recent years can be attributed to the imminent closure of the iconic Argyle mine. Located in the West Kimberly region of Australia, the Argyle mine is responsible for producing over 90% of the world’s pink diamond supply, but it’s not only that. The pink diamonds that come from this mine, also known as the Argyle Pinks, have a quality and saturation unrivaled by any other, and is a contributing factor to their price premium.

With the closure of the mine approaching towards the end of this year, natural pink diamonds are not only getting rarer by the minute, the Argyle Pinks will also become finite. With such limited supply and demand constantly growing, the value of these stones might increase even more.

Pink Diamonds as a Secure and Portable Investment

In addition to being an exceptional alternative asset, unaffected by economic turmoil, and with potential for a value increase during the next decades, pink diamonds have also seen a surge in popularity due to their “convenient” nature. While most tangible assets require considerable storage space, vaults, care, and often go without being enjoyed by their owners, pink diamonds can be easily stored, moved, and worn.  Colored diamonds are highly portable and durable, and can be either stored right after purchase, or be later set in jewelry (if bought loose,) allowing you to enjoy and wear your investment.

With months or even years of economic uncertainty ahead of us, investing in assets that will not only secure your wealth but potentially increase it sounds like a very safe alternative.

We stand ready to work with you!

With over 50 years of combined experience, Sunburst Rare Diamonds strives to provide industry leading insight, stay on top of the latest trends, and provide high quality colored diamonds to all our customers. If you would like to get some additional information regarding colored diamonds or if you are in the market to purchase one please feel free to schedule a meeting with one of our leading professionals and we would be happy to talk with you.

Investors that have been seeking more long-term secure placements have slowly shifted their interest toward a different type of moveable hard asset that was previously only really considered and to some extent reserved to wealthy collectors: diamonds, and more recently, investments in colored diamonds.

• What is causing investors to invest in diamonds
• Investing in diamonds in numbers

What is causing investors to invest in diamonds

There are several reasons that could explain why more and more investors are turning to diamonds in the past years, ranging from the protection they offer against inflation to their prestige, the low maintenance costs and the fact that they are bankruptcy proof. There is also the fact that investors, who initially invested in diamonds on behalf of their wealthy clients, are starting to invest individually or with partners in diamonds themselves.

But one main aspect that has made investments in coloured diamonds even more attractive is the soaring record breaking prices fancy coloured diamonds have been fetching at auctions these past years.

For instance, in May 2016 the “Oppenheimer Blue”, an incredible 14.62-carat blue diamond, was auctioned at $57.5 million.

Then on 4th of April 2017, the stunning Pink Star Diamond sold for $71.2 million, making it then the most expensive diamond in the world. To top this off, this 59.60ct Fancy Vivid pink diamond is the largest Internally Flawless diamond known.

Investing in diamonds in numbers

According to the Fancy Color Research Foundation, the price of pink diamonds has increased 180% in the past year and is now at a record high. Blue and yellow diamonds are up by around 70% and 90%, respectively.

Then, according to the 2017 Wealth Report published by Knight Frank in London, which outlines the trends regarding luxury spending, the investment drivers and the objects of desire of 2017, the overall investments in colored diamonds have risen with 122% since 2016, which is considerably high.

This again is proof that your wish to eventually make investments in colored diamonds or to extend your current portfolio is certainly the best thing to do in 2019.

Sunburst has proven experience in diamond investments, it has a beautiful selection of colored diamonds to match all taste and they have an experienced team of experts that will be able to fully support you in the investment process.

• What decides colorless diamonds’ investment value?
• Why would I buy colored diamonds?
• Which other factors are important?

Diamonds have been highly coveted for centuries, but their value really skyrocketed thanks to De Beers at the beginning of the 20^th century. It has steadily increased since then, a trend which continues today. What makes diamonds so valuable? Why should I buy diamonds as an investment?

What decides colourless diamonds’ investment value?

Colorless diamonds draw their value from the well-known 4 C’s: carat, color, clarity, and cut. The interaction between the different factors decides their value as a whole across the globe. That means that contrary to popular belief, diamonds do have a constant objective value which evolves in concert with the market, just like every other investment. When you want to buy diamonds as a first investment, the certificate specifying the 4 C’s is the most important factor. It guarantees that you get what you pay for and will prove invaluable when liquidating your diamond investment.

Make sure you buy your diamonds from diamond investment experts highly familiar with the market prices. They will introduce you to the diamond industry from an investor’s point of view and make sure that you invest smartly.

Why would I buy coloured diamonds?

Coloured diamonds play in a league of their own. Since they answer to completely different standards than the colourless type, your certificate will not mention the 4 C’s. Instead, you will receive a fancy colour report based on 3 factors: hue, tone and saturation. GIA recognises 27 different hues in a wide range of possible colours. Saturation is used to express the intensity of the colour. Coloured diamonds have been on the rise for quite some time due to their heightened use in jewellery and interest in coloured engagement rings from celebrities.

That popularity makes coloured diamonds a slightly bigger investment, but also a more lucrative one. They are particularly valuable as a second investment in diamonds.

Which other factors are important?

A diamond’s investment value lies not only with its position in the market but also draws from emotional value. A highly qualitative diamond will always fetch a high price, but personal history increases that base value. Pieces passed down from generation to generation or set in diamond jewelry add to the elusive and romantic character of diamond investment. Ready to buy diamonds? Then start by adding smaller loose diamonds to your portfolio and choose higher value pieces once you are more familiar with the diamond market. As with any investment, diamond investment values require expert knowledge slowly built with experience and support from professionals in the business.

Where can I buy the perfect diamond for my portfolio? Who can help me get acquainted with the diamond market? Contact the diamond investment experts at Sunburst Rare Diamonds Inc. for professional support!