Investing in exquisite, rarified beauty Capital Coloured Diamonds inc provides affluent investors and diamond aficionados with the opportunity to secure their wealth and maximize their investment power through the steadily appreciating, rare beauty of coloured diamonds. Capital Coloured Diamonds Inc. is a Toronto-based company specializing in the procurement and sale of Natural Fancy coloured diamonds, and the commissioning of custom designed jewelry pieces. We have dedicated over fifty years of professional experience in the industry to serving a diverse international clientele.
Coloured Diamonds: Rarified Beauty, Tangible “….a valuable stone is the only thing that endures. Lace is soon a rag, velvet impossible, flowers dead, but a jewel….lives forever” - H. Bridgeman Fancy grade coloured diamonds are the ultimate hard asset for the refined investor. Rarified, easily ransportable, compact, discreet and elegantly beautiful, Fancy coloured diamonds currently represent the most concentrated form of wealth on the planet. A Low-Risk, High-Return Investment An investment in a tangible asset is especially attractive during these times of sustained global economic inconstancy. Bringing to mind the traditional fable of the Ant and the Grasshopper, the last decade has seen a significant shift from investing in risky, quick money making schemes, to modes of concentrated wealth storage and more secure, longer-term investments. A volatile world economy coupled with unethical trading practices and illusory earnings on the stock market have all contributed to a growing global trend towards investing in hard assets like fine art, real estate and fancy coloured diamonds. However, quite unlike real-estate, coloured diamonds are a tangible asset that will hold their value when
inflation or recession hits. Coloured diamonds have weathered three recessions with their value intact and the most recent recession saw coloured diamond values skyrocket even as the values of other hard assets plummeted. Industry and economic experts are referring to fancy coloured diamonds as “a bright spot in investment,” and “a safehaven investment” that is seemingly “immune to tough times”. Consequently, savvy investors are increasingly buying coloured diamonds to diversify their portfolios and to serve as hedges against financial instability. A Steadily Appreciating Aesthetic Asset In the forty years since the industry started tracking them, Fancy grade coloured diamonds have never depreciated in value, making them one of the most stable low-risk, high-return investments. Since 2001, the value of Fancy coloured diamonds has increased faster than any stock, and indeed, reassuringly independent of the stock market. Fancy coloured diamonds are currently appreciating in the double digits per annum, with some of the best collector stones doubling in value approximately every five years. This is a trend that is only going to intensify as swelling demand outstrips the dwindling global supply of an already exceedingly rare resource.
Beautifully Discreet Fancy coloured diamonds are a unique asset in that they can be discreetly and privately procured, owned, transported and liquidated. In the United States they are classified as a non-registered asset, meaning there is no law mandating public disclosure of sale or possession. This is attractive to the discreet investor and also allows diamonds to function as a practical safeguard against the losses of bankruptcy, divorce or lawsuit. Additionally, they can be legally transported and privately sold across most international borders, and unlike most other assets, can be bought and sold in foreign currencies. They can be given as luxurious gifts, established as family heirlooms (as the king of your castle, your very own “crown jewels”), be set into stunning custom jewelry or strategically squirreled away to quietly accrue value. “Economies of Rarity”: Valuing the Exotic World markets, particularly those dealing in luxury goods, operate solidly on what has been termed “economies of rarity” (the economic principle of supply and demand). Thus, the value of coloured diamonds is determined not only by their exquisite, unequaled beauty, but also by their natural rarity. Coloured diamonds are nature’s works of art, and like all exceptional art, their value is magnified by their scarcity. Only 1% of all gem quality diamonds unearthed are coloured diamonds, and only one out of every 10,000 carats of coloured diamonds mined is a certified Fancy grade coloured diamond. The fact is that there have been no significant new
diamond discoveries in over a decade, any new deposits found would take about a decade to develop, and the demand for investment-grade fancy coloured diamonds is already close to outstripping supply. It is predicted that in the near future, almost all of the trade in investmentgrade coloured diamonds will be confined to diamonds already in private collections, resulting in skyrocketing values. Coloured Diamonds and the Ripple Effect of Aesthetic Desire While the value of coloured diamonds is strongly associated with their particular hue rarity (highly saturated red, green and blue being some of the most rare) and size (as highly saturated coloured diamonds over a carat in size are exceedingly rare), it is important to understand that it is not just the rarest of coloured diamonds – the Rob Reds, Spirit of Grisogonos or Ocean Dreams – that are precious. The value of Fancy coloured diamonds is also strongly determined by their individual beauty, the whims of fashion,and the rarity of and increasing desire for coloured diamonds in general. For example, champagne or cognac diamonds are some of the most common of coloured diamonds, but are nonetheless in high demand simply due to their extraordinary beauty. Black diamonds, once dismissed for their lack of brilliance, are now associated with avant-garde artistic expression and masculine sophistication, and are particularly chic among North American glitterati. The rarified beauty of coloured diamonds means that heightened worth can be ascribed to a stone by the buyer at the time of acquisition, presenting even greater investment potential.
Nature’s Rare Works of Art With rare works by artists such as Rousseau, Picasso, Klimt or Monet it is initially the most famous pieces that are deemed most pricious. But as these pieces disappear into private collections and art museums, first the lesser known works, then the unfinished works, and finally sketches, fragments and even the artists’ notes have come to be highly valued by collectors and connoisseurs. The same principle is applicable to Fancy coloured diamonds; as a rare aesthetic asset, high quality coloured diamonds – whatever their particular hue or size - are increasingly sought after by savvy investors, connoisseurs and those who simply love beautiful things.
Expanding Markets: Future Investment Potential A rapidly growing wealthy business class in India and China has meant soaring expansion of luxury markets in those locales. The single factor of increased consumption in China and India caused a 50% surge in diamond prices in the first six months of 2011 alone. China’s gem and jewelry industry is predicted to triple in the next three years, reaching U.S.$200 million by 2015. A particular passion for Fancy coloured diamonds among China’s bourgeoning nouveau riche means that demand for fine stones there is currently outstripping demand. Economic forecasts for China’s growth would suggest this trend is only going to intensify over the coming decade.
An entire year’s yield of Argyle pink diamonds of a half carat or larger would fit into the palm of your hand, and the number of similarly sized rare violet coloured diamonds found would barely fill a teaspoon.
Pink Argyle Diamonds: Beyond Rare Ranging in hues from Orangish-Pink and PurplishPink to the extremely rare Reds, pink diamonds embody notions of blushing love or fiery passion. Indeed, pink diamonds are replacing white (colourless) diamonds as the ultimate symbol of femininity and romance, making them natural choices for engagement rings and luxurious gifts for Her. The rarity and beautiful mystique of pink diamonds also render them highly valuable to investors, on average attracting over 20 times the price of comparable white (colourless) diamonds. Rio Tinto’s Argyle Diamond Mine Rio Tinto’s Argyle Mine is situated in western Australia’s rugged Kimberley region. Australia itself is the land of rarified beauty, home to exotic and unusual plants and animals found nowhere else on earth. It is fitting then, that one of Australia’s rarest, most precious natural resources is the Argyle Pink Diamond. To put their rarity into perspective, over 90% of the world’s pink diamonds come from the Argyle mine, but less than one tenth of one percent (0.0001%) of the diamonds mined each year at the Argyle mine are pink. The most exceptional pink Argyle diamonds – almost all of them under 1.00 carat – are sold each year at exclusive auctions called “tenders” where participation is extended by invitation only to the world’s leading jewelers
and diamantaires. These tendered pink stones have achieved prices of between USD$100,000 and USD$1,000,000 per carat. Of every million carats of rough diamonds unearthed at the Argyle mine, a single carat is found worthy of sale at these tenders, and in almost three decades, less than 800 such stones have been found in total. Remembering that it is the world’s primary source of pink (and blue) diamonds, it is highly significant to investors that the Argyle mine is currently experiencing reduced production and is expected to cease further exploration by 2018. A spokesperson for Argyle has flatly stated that “The chance of any future mine discovery replicating the unique properties of the Argyle mine is extremely low”. Thus, the rarity – and consequently, the value - of natural pink diamonds are only going to intensify. An Ethical Investment Argyle Pink diamonds are 100% conflict-free, ethically sourced diamonds. Rio Tinto consults with and re-invests in local indigenous communities and works with local environmental groups to support conservation projects. The Argyle Mine’s operations observe the highest quality of worker safety protocols and employee relations standards. Principled investors can rest assured that Argyle diamonds represent an ethical acquisition.
Elegant, Wearable Wealth For the sophisticated woman, or man of discerning taste, Fancy coloured diamonds, like fine art, are one of the very few secure investments that can be aesthetically appreciated even as they appreciate in value. Gracing the wrists, earlobes, fingers and décolletage, they become glittering outward expressions of spirited beauty one can share with the world. From their first discovery in India between the 8th and 4th centuries B.C.E., diamonds have endured as timeless symbols of opulence, magic and indestructible beauty. Since the 1930’s, diamonds have also been solidly established as the stone of choice to symbolize eternal love. Due to the rarity and unusual beauty of coloured diamonds, Argyle pink, canary and champagne or cognac diamonds in particular are becoming new favorites for
engagement and wedding rings, as they are each as distinct as the love they represent. In the current cultural climate of mass-produced artificiality, there is an intense longing for modes of self-expression that are genuine and unique. This longing is clearly evident among the business and artistic elite in their growing love affair with custom designed jewelry set with coloured diamonds. Unlike white diamonds, which are valued for their “purity” and therefore sameness, coloured diamonds are visually singular, as unique as their wearer. In brilliant hues of canary, chocolate, blush, champagne, ruby, spring grass, sunset and morning sky, Fancy coloured diamonds speak to our need for complex expression of our diverse tastes. While the availability of coloured diamonds is on the decline, our love affair with them has just begun.….
The 5 C’s of Diamond Evaluation and Classification Diamonds are evaluated and classified using the industry standard “4 C’s” of Cut, Clarity, Colour and Carat, and increasingly, a fifth “C” – Certification. Cut The cut of a diamond refers to both its shape and faceting style, which are selected to bring out its natural brilliance and fire. Common diamond shapes include pear, round, marquise, trillion, cushion, square, briolette and baguette. Diamonds can be cut with emerald, rose, brilliant, scissor or step faceting, to name a few, or be cabochon (smooth, un-faceted). There is even an emerging trend in custom made jewelry to use rough-cut or irregularly cut diamonds. The desirability of a certain cut of diamond depends on the shape and internal characteristics of the rough diamond, unique personal taste, current fashion, and even the history or lore attached to a certain stone. Some very old diamonds were hand-cut using methods no longer practiced and feature cuts particular of their era and origin, or are damaged thus representing embodied historiographies that add to their value. Clarity Diamond clarity refers to the relative presence of “birthmarks”, or small imperfections within the diamond, called inclusions (surface imperfections are called “blemishes”). Gem quality diamonds are almost always graded using the GIA’s diamond clarity scale which rates diamonds as having a
clarity between FL - Flawless, having no inclusions or blemishes - and I3 - containing visible inclusions that impact the diamond’s transparency, brilliance and even structural integrity. *AGS, the other major certification authority, uses a numerical clarity scale with 0 being the “cleanest” and 10 containing the most imperfections. White diamonds have been historically valued not for their rarity per se, but for their hardness, brilliance and clarity. In contrast, coloured diamonds are themselves rare, and represent a different aesthetic altogether from white diamonds. Clarity is therefore less important as a signifier of value in coloured diamonds and in any case, their colour make inclusions less visible. Additionally, as synthetic diamond technology makes it increasingly difficult to distinguish between natural and artificial diamonds, inclusions have come to function as a ‘fingerprint’ for each diamond, and a way of ascertaining the diamond’s natural origin. Colour The GIA colour grading system classifies coloured diamonds based on a range of twenty-seven hues (the diamond’s primary colour, e.g. orange, plus secondary colours, if present, e.g. Brownish-Orange, or b-O with the dominant colour always listed last). The colour saturation and tone (brightness) of coloured diamonds are classified using nine saturation descriptors that then determine the
coloured diamond’s grade. These descriptors are: Faint, Very Light, Light, Fancy Light, Fancy, Fancy Dark, Fancy Intense, Fancy Deep, Fancy Vivid. It is the intensity and brightness (tone) of the colour that influences desirability. For example, a Fancy Deep Blue diamond would ordinarily be Saturated red and purple diamonds are the rarest of coloured diamonds, followed by pink, blue, green, orange, yellow, black and brown. That said, it is vital to remember that it is demand - or desire - that is the strongest determinant of value; black and yellow diamonds, while not the rarest of coloured diamonds, are extremely chic right now. Brown diamonds, sometimes called Chocolate, Cognac or Champagne, are the most common of coloured diamonds, and yet saturated brown diamonds are highly prized. Carat The carat is the unit measurement used to express the size (mass) of diamonds. The standardized metric carat adopted in 1913 is as follows: 1 carat = 200 milligrams (0.20 grams) 5 carats = 1 gram Perhaps due to the dramatic histories of some magnificently large coloured diamonds, or perhaps due to a misguided notion that bigger is always better, connoisseurs and investors are sometimes misled into seeking out coloured diamonds based
solely on their size. It is vital to remember that the intensity of a diamond’s colour determines the preponderance of its value. A smaller diamond with intense colour and fire possesses a more rarified beauty and therefore often a greater value than a larger diamond with a less intense colour. Fact: The diamonds with the highest colour saturation are often a half carat or less in size. In addition, as larger coloured diamonds become scarce, smaller stones with intense colour – already precious – are becoming even more sought after. Certification There is an emerging standard within the industry for the adoption of a fifth “C” in the grading and classification of diamonds – Certification. A certification or grading report is a written summary of a thorough scientific evaluation of a gem by a qualified professional. It should detail the 5 C’s as well as any additional information about a gem, such as its known or likely geographic origin (e.g. Burmese Ruby, Columbian Emerald, Argyle diamond, etc.), its natural origin and whether or not the gem has been heat treated to alter its colour. The presence of an evaluation certificate, for example, a GIA certificate, is important when either buying or selling coloured diamonds, as it confirms characteristics affecting the value of the stone, and as such, should be treated as part of the investment.
Contact Us To view our current selection of diamonds, to commission the creation of a custom jewelry piece, or to make an appointment to meet with one of our specialists, please feel welcome to contact us through e-mail on our website, by telephone, or in person at our Toronto office. Website: www.capitalcoloreddiamonds.com Telephone (International): 1.888.474.4572 Telephone (Local): 416.479.8322 Street Address: 120 Eglinton Avenue East, Suite #600A Toronto, Ontario M4S 1E5 CANADA
Published on Jul 10, 2013