A guide to coloured diamonds


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A guide to coloured diamonds compiled for London Commodity Markets, including why they are attracting the attention of investors, and how to value them. http://londoncommoditymarkets.com/coloured-diamonds.php

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A guide to coloured diamonds

  1. 1. "Diamonds have emerged as a safe haven investment alongside favouritessuch as gold" - Financial Times London Commodity Markets Page 1
  2. 2. Coloured Diamonds AreAttracting AttentionColoured diamonds have started attracting the attention of investors around the worldrecently, as the economic turmoil seen in many markets is creating a strong demandfor safe havens.As well as their renowned aesthetic appeal, coloured diamonds also represent stronglong-term value; returns for the gems beat those of equities for much of the past 15years.The Financial Times reports that from 1999 to 2011, three-carat diamonds increasedby 145 per cent, while five carat diamonds rose by 171 per cent, as measured by theRapaport Diamond Trade Index."If we continue diamond mine at this rate - we are within 20 yearswithout" - De BeersAccording to NuWire Investor,the appreciation this commodityhas seen over the past decade isunprecedented. Generally thestones that fetch the highestand most surprising sums arethose of highly rare colours,sizes, and shapes. VashiDominguez, chief executive ofdiamond trading company Diamond Manufacturers, says: “Certain types of diamonds,including coloured diamond varieties, have held their value over the past few yearsbetter than other more volatile equity investments,”And larger stones can certainly reap rewards for investors; the price of a typical five-carat stone has grown by more than 150 per cent over the past ten years. London Commodity Markets Page 2
  3. 3. "By 2016, global demand for diamonds will outstrip supply by 7 millioncarats" - BloombergThe colour and intensity of a diamond is as important as its size or weight. A FancyVivid Blue diamond less than half a carat in size could run into millions of dollars. AFancy Intense Pink round diamond over five carats could bring in millions of dollars aswell. On the other hand, a yellow diamond would have to be extremely large andunusual to bring in figures anywhere near these sums.Regardless of a coloured diamond’s colour, shape, size, or quality, the bottom line isthat due to the rarity of these stones in addition to the high demand, prices are soaringon a yearly basis. This makes coloured diamonds ideal investment opportunities.Though there are some coloured diamonds that are better to invest in than others, allcoloured diamonds are wise as far as investments go."Yellow, pink and blue diamonds are catching the eye of investors aroundthe world, according to dealers and industry insiders" - ReutersColoured Diamonds as Investments Regardless of the purpose of your purchase, and especially in the event that the diamond is used for an investment, be sure to first speak with a professional. The diamonds that have demonstrated the most impressive numbers and are sought after by investorsare pink diamonds, top quality yellow diamonds above 2.00-carats in size, and bluediamonds. When selecting a coloured diamond it is difficult to say without firstassessing the stone, but in general go for the highest intensity your budget will allow,while still maintaining a decent clarity, size, and carat weight. If you cannot get a purecoloured, go with a coloured combination that showcases the colours well. There areso many options, but it is up to you to decide on the right colour, based on your taste,and on your wallet. London Commodity Markets Page 3
  4. 4. "When times are bad, diamonds can hold their value better than real-estate and have the advantage of being portable" - ForbesHow to Value Coloured DiamondsUnlike gold, which can be valued purely on weight, diamonds need to be valuedindividually based on factors such as shape, colour and clarity.The common perception is that diamonds are sold using the “carat” value. This may bepartially true on “jewellery” diamonds, but for “collection” diamonds the 4C’s are whatmake up the value. These are:Cut, Colour, Clarity and Carat.The cut of the diamond is the mostimportant of the four Cs, as the skill ofthe diamond cutter is what gives adiamond its brilliance. A badly cut bigdiamond won’t sparkle in the same wayas a well-cut smaller one.Diamonds have a colour gradingsystem to show how much yellow (caused by nitrogen in the stone) is in them. Thegrades D, E and F are colourless and therefore the most sought after. Avoid any colourlower than grade H as it starts to become too yellow. Clarity is also important, with thebest grading being flawless.Investors who decide to buy and hold diamonds also need to factor in the cost ofsecurity and storage.“The prices of diamonds are expected to enjoy a compound annual growthrate of 16% until 2014” - leading diamond supplier Graff.Content sources: http://www.ft.com http://www.nuwireinvestor.com London Commodity Markets Page 4
  5. 5. About London Commodity MarketsWith over a century of combined experience in the alternative investments market,the team at London Commodity Markets have a proven track history of deliveringexcellent consultation as well as an unrivalled service to clients.As a result of this unrivalled standard of service, quality advice and ethical approach tothe marketplace, London Commodity Markets have become the globe’s fastestgrowing alternative investments company.London Commodity Markets can provide information for people interested in investingin 100% natural fancy blue diamonds at excellent prices and certified by GIA.All diamonds supplied from London Commodity Markets come with a GIA certificate.This is issued from the Gemological Institute of America, the worlds foremostauthority in diamond grading. This certificate shows your diamond is the exact qualityyour were sold.London Commodity Markets can help you diversify your investment portfolio securelywith access to GIA certified fancy coloured diamonds. http://londoncommoditymarkets.com/ HEAD OFFICE Citibank Tower, 25 Canada Square, Canary Wharf, London E14 5LQ Tel: 00 44 (0) 203 514 6000 / Fax: 00 44 (0) 203 514 6001 Email: info@londoncommoditymarkets.comDisclaimer:This document is issued by London Commodity Markets for the sole purpose of assisting the recipient in deciding whether toproceed with further analysis of this potential project and opportunity. The information in this document is general andinformational only and is not intended to constitute professional or investment advice, or to be construed as an offer orsolicitation for the subscription or purchase or sale of any securities, or as an invitation, inducement or intermediation for the sale,subscription or purchase of securities. This document does not take into account the recipient’s particular investment objectivesor financial situation. Before making any investment decision, the recipient should conduct its own investigation and analysis ofthe project, as well as any data, pricing and projections described herein. London Commodity Markets does not give any warrantyor representation as to the reliability or accuracy of the information contained herein, nor does it guarantee that the stated pricingand projections will be available to the recipient.London Commodity Markets are neither registered nor regulated by the FSA, and are not authorised to carry out regulatedactivities. All markets relating to Rare Earth Elements, Oxides and Metals are not regulated by the FSA, and as such anyoneinvesting in these markets would not have access to the Financial Ombudsman Service (FOS) or Financial Services CompensationScheme (FSCS).The information contained herein is for information purposes only, and is not intended for trading purposes or deemed to beinvestment advice or constitute a service. London Commodity Markets, directors or any of its staff, agents, creators andadministrators of londoncommoditymarkets.com website shall not be liable for any errors or delays in the content of these pages,or for any actions taken in reliance thereon. As with any Investment there is a risk of losing money. Rare Earth Products arealternative investments and such should be regarded as high risk.LONDON COMMODITY MARKETS IS NOT REGULATED BY THE FSA OR SEC. London Commodity Markets Page 5