Dalby Diamonds - Sidsel Dalby Glerup

DALBY DIAMONDS

BY SIDSEL DALBY

Fear of the coronavirus’s impact has roiled markets. What should investors consider at uncertain times? Fancy colour diamonds remain the top wealth concentration investment vehicle during uncertain times.

In the last 20 years, the prices of fancy colour diamonds, especially pink diamonds have skyrocketed, making them popular among investors and celebrities who enjoy the mobility of a stable, high-value asset that will continue to yield an almost guaranteed return.

Dwindling supply and a surge in the demand for rare diamonds indicate that the prices of these wondrous natural treasures will continue to increase. On the next page, you can find all the information, tips and tools needed for making a smart investment in one of the most popular assets of recent years.

Vision

Protect and increase your wealth

Diamonds are the most concentrated form of wealth with the highest size to value ratio of any natural resource or any other investment goods. Several million dollars’ worth of diamonds can fit in one hand and can be transported in your pocket very discreetly.

Throughout history, diamonds have been used as a method of capital preservation and wealth accumulation, as well as a stable high growth asset class against a backdrop of global market volatility. While gold and silver fluctuate in the market, demand for alternative investments is growing more than ever and investors are purchasing diamonds as a way to counteract impending inflation. Fancy colour diamonds and larger white diamonds may be the last tapped natural resource to turn into a broader financial instrument.

Learning how to acquire diamonds can help you expand the diversification of your assets.

Fancy colour diamonds, especially pink diamonds, considered to be the rarest of the rare, are the most sought after, the ‘must haves’ for investors and private collectors with an eye for profit.

https://www.telegraph.co.uk/luxury/jewellery/invest-2020-25m-hypercars8es-pinkdiamonds/

Investment Highlights

Rare Investment Opportunity

Be they pink, blue, green or orange, diamonds are very rare, very special and very sought after, making them a great investment. Fancy colour diamonds offer many advantages to investors: a hard asset that can hedge against inflation and the devaluation of paper money, with low correlation to other asset classes and almost zero correlation to equities.

Strong Market Trends

Fancy colour diamonds as an investment offer an incredible opportunity to profit over the long term as the supply/demand balance is more acute than in the white diamond market. Supply is exceedingly tight due to the shutdown of the world’s largest source of fancy colour diamonds – The Argyle Mine. Only 1 in 10,000 carats mined are fancy colour and for every 100,000 diamonds unearthed, there will just one diamond of the finest colour and intensity according to the GIA and the Fancy Colour Research Foundation, so very little supply enters the market each year.

Investment Network

The unique and uncommon nature of coloured diamonds is underscored and enhanced by the secrecy surrounding a rare coloured diamond when it appears on the market.

Only 15% of coloured diamonds for sale are purchased at auctions. In many mines, the best coloured diamonds, typically around only 50 annually, are sold through sealed bids in an annual tender.

Investors must be invited to the viewings, which are held at secret locations in London, New York, and Hong Kong. These secret viewings of the world’s most expensive coloured diamonds create a covert ultra niche market accessible only by the initiated - which significantly enhances the stone’s allure and perceived value.

Dalby Diamonds Investment Network connects the ‘secret society’ of rare off-market diamonds with investors and private collectors.

Second-hand Market Opportunity

Unless new mines are discovered in the near future, coloured diamonds will be even more rare than they are now - and considerably more valuable. By the time your grandchildren buy their first diamond, most mines will have reached the end of their life cycle and the vast majority of diamonds will be sourced from the secondhand market. These circumstances will make the pre-owned diamond arena the largest “mine” in the world.

Portability

Diamonds are obviously very portable. They have the highest size-to-value ratio of any natural resource or any other investment good. Several million dollars’ worth of diamonds can fit in one hand and can be transported in your pocket. In the world we live today portability and stability serve as major advantages for diamond investment. Life can change abruptly and having such concentrated portable assets is a source of comfort and security.

No maintenance fee

Diamonds have no maintenance costs during the investment period. Diamonds are the hardest material on earth, literally, so they don’t need repairs or renovations over time. There are no surprises with diamond investment, what you pay upfront is the only sum you need to worry about.

Source: The Fancy Color Research Foundation

The end Of An Era

If you have ever read or researched anything about pink diamonds and pink diamond jewellery, even casually, you are no doubt aware that the vast majority of the world’s current supply of these stunning stones was mined from the Argyle Mine in Western Australia.

However, all diamond mines inevitably “burn out,” despite holding such a vital role within the diamond industry and the investment sector, and, sadly, the Argyle mine is no exception. The Argyle mine’s resources were long projected to be completely exhausted by some point in 2020 and the mine did indeed cease operations on November 2nd, 2020.

Diamonds in general, and that includes the fancy-coloured gems used to create pink diamond jewellery, are thousands of years in the making. They do not replenish themselves, and given that scientists and gemologists still disagree, to a certain extent, about just why pink diamonds are pink, their supply was always going to be finite.

Return on investment

It has been a bullish decade for the fancy colour category. Over the past decade, the lucky few capable of owning rare fancy coloured diamonds achieved significant return on investment:

According to data published by the Fancy Color Research Foundation (FCRF), the general Fancy Color Diamond Index showed a steady market price increase of 77% from 2009-2019. Leading the index during the decade were Pink diamonds, which increased by 116%. The prices of Blue diamonds rose by 81% and of Yellow diamonds by 21%.

The investment forecast of diamonds predicts that valuations are only set to rise as diamond production is set to to drop significantly within the next 20 years.

Source: The Fancy Color Research Foundation

Performance against capital markets

Despite the expected recession globally, we believe the fundamental outlook for the diamond industry is very strong long-term.

Long term investments

Diamonds are like real estate, suitable for investors who are not looking for fast returns on their investment. In each case, you risk losing money if you try to “flip” your investment. Coloured diamonds do appreciate in price relatively quickly, but it would still be wise to let them “mature” enough, so that your investment return is much more substantial.

The real estate market history is full of bubbles bursting. Unlike the real estate market, the diamond market has proven to be much more stable, so coloured diamond investors incur less of a risk.

An asset that can appreciate when transformed into jewellery

Personal luxury and diamond jewellery spending is skyrocketing in developing markets such as China and India. These markets are in particular seeing a growth in the ranks of newly made and young millionaires, who are on average, under 40 years old. These youthful, nouveau riche investors do not only want to secure their wealth, but they want to do so in style.

Diamonds will always remain a luxury item, with classic and eternal beauty. You will always get enjoyment out of your dazzling diamond set in that special piece of jewellery.

Alternative investments and passion funds

It is clear the marketplace has been transformed. One of the drivers is a surge in loose coloured diamonds being purchased as investments to serve as discreet, valuable, and lucrative assets.

Investors include professionals and funds investing on behalf of HNWI clients who buy coloured diamonds as alternative investments. This new demographic of investors has significantly expanded the diamond market, traditionally dominated by rare gem collectors and connoisseurs.

They are investing increasingly in what are coming to be called “passion funds”, long-term investments in tangible and usually rare assets. These investments appreciate over time and are generally safeguarded against unpredictable inflation or market fluctuations.

Passion fund goods include fine wines, works of art and collectable musical instruments, as well as rare coloured diamonds. In addition to guaranteeing high returns, part of the enticement of these niche investments is that they are luxurious and reflect the social status of their owners.

A significant advantage of diamonds over other passion fund investments is that they are an asset that investors can actually use and enjoy at no cost or depreciation to the asset itself.

Source: Knight Frank investment Index

“DIAMONDS WILL ALWAYS REMAIN A LUXURY ITEM, WITH CLASSIC AND ETERNAL BEAUTY. YOU WILL ALWAYS GET ENJOYMENT OUT OF YOUR DAZZLING DIAMOND SET IN THAT SPECIAL PIECE OF JEWELLERY.”

Valuation of coloUred diamonds

There are three simple steps to determine a diamond’s value and avoid getting exploited when buying coloured diamonds:

• Choose a coloured diamond with certificate from Gemological Institute of

America (GIA) only.

• Learn and understand the 4Cs of diamond quality to determine the value of the diamond shown in the certificate.

• The most basic pricing principle in the world of natural diamonds, whether fancy coloured or colourless, states that the rarer the diamond, the higher its value. There is no predetermined linear scale that gradually dictates the diamond’s pricing. Each diamond has its own unique features and its price will be determined according to their regularity or rarity. Find a fair and honest retailer, or even better, an independent diamond dealer who will help you understand the true value of coloured diamonds!

Dalby Diamonds Investment Network – By invitation only!

Diamonds are a non-renewable resource, a precious mineral formed through millions of years of creation. As such, the availability of diamonds on the market is dependent on existing deposits, which are being depleted at a much faster rate than there are being renewed.

Unless new mines are discovered in the near future, coloured diamonds will be even more rare than they are now - and considerably more valuable.

However, investing in diamonds is a complex decision. Learn more about each coloured diamond in our Coloured Diamonds Wiki, or consider speaking to our investment experts for pre- and post-valuation services.

If you have made up your mind to join the club of elite investors seeking recession-proof investments, get one step closer to your invaluable investment with Dalby Diamonds Investment Network.

Contact us for further information info@dalbydiamonds.com dalbydiamonds.com

Sidsel Dalby Glerup is one of very few global female diamond brokers. She feels right at home working in the secluded and male-dominated world when she hunts for the most rare and sometimes unobtainable precious stones on behalf of her discerning and wealthy clients. Should you wish to to contact Sidsel she is available at sdg@dalbydiamonds.com instagram.com/dalbydiamonds

Dalby Diamonds has been in the luxury diamond business for 10 years, creating personal relationships with clients and producing only the highest quality coloured diamonds and jewellery. Backed by leading diamond industry pioneers and trading companies, Dalby Diamonds are able to offer our clients the rarest diamonds, and exclusive off-market deals at attractive prices.