Invest in pink diamonds: Everything you need to knowJune 3, 2019
Investing in pink diamonds is a sophisticated way to diversify the portfolio of our investment portfolio and, at the same time, gain long-term security.
For most people, pink diamonds are conceived as a decorative element integrated into a jewel, be it a ring, a pendant or a bracelet.
This precious stone rivals gold and silver as a way of long-term investment.
However, the diamond investment has a differentiating characteristic from the one made on these precious metals.
The sharp fluctuations of these in recent years are usually not typical of the diamond market. On the contrary, the profitability obtained with these last ones becomes palpable with the passing of the years, approximately between 15 or 20 years.
Benefits of investing in pink diamonds
Assuming we can afford it, diamond investment implies a series of benefits for the long-term-minded investor.
Stability of prices and revaluation: Contrary to what happens with other personal property whose value can be reduced over time due to progressive ageing, pink diamonds retain their worth intact.
Also, price stability and a historical average of annual revaluation of between 4 and 16%, make pink diamonds excellent insurance against inflation, as well as against economic crises.
Convertibility: Pink diamonds are well accepted almost anywhere in the world. Now, in case of wanting to sell them, we will need to go to expert pink diamond makers or professional auction houses to make sure that we get a fair price.
Transportability and reduced maintenance: The stones of small size can be transported easily. On the other hand, and leaving aside the need to keep diamonds in a safe place, pink diamonds have zero maintenance costs.
The property is not taxed: Unlike real estate, having diamonds in property does not involve paying taxes.
Growing shortage: Estimates suggest that by 2050, the world’s leading diamond mines will be exhausted, which is an excellent indication of the appreciation that this precious stone can experience over time.
How can I invest in pink diamonds?
There are many alternatives when doing diamond investment, although each of them implies very differentiated factors.
– Purchase of “investment pink diamonds.”
For some time, some entities market what is known as pink diamond investment. Some diamonds with particular characteristics regarding weight, colour, cut and purity, which make them precious stones especially valuable.
– Purchase of rare and large pieces
Undoubtedly, the best pink diamond investment are those that take place on very rare or large pieces. The scarcely colored diamonds, such as the coveted black diamond, as well as the multi-carat gemstones, represent a large investment because their scarcity makes possible a rapid revaluation. However, it is necessary to emphasize that this type of diamonds are only within reach of great fortunes.
– Participation in pink diamond investment funds and purchase of shares of listed mining companies
The former are exchange-traded funds, whose shares can be acquired by investors. The investment of mining companies can also be an indirect way of putting part of our capital in these precious stones.
Dangers in investing in pink diamonds
As in any investment, some conditions can affect profitability, especially if we are not experts in the field, that is why you must take into account several factors that could endanger not only the profitability but the investment itself. Same Let’s see what these dangers are:
– Purchase jewelry with embedded pink diamonds
Jewelry with pink diamonds cannot be considered an excellent form of investment. The exorbitant margins that are charged in design and brand quality generate that the sale price greatly exceeds the intrinsic value of the pink diamonds or the precious metal used.
Jewelry should be purchased with a clear purpose of personal enjoyment and not as a form of investment. It is true that, in case of need, we can always pawn or sell this type of goods, but we will hardly obtain a positive return.
– Controversy over the overvaluation of pink diamonds
The Gemology Laboratory was recently excluded from the inventory of the prestigious Argyle Diamond Investments group. The latter, in addition to marketing with pink diamonds, is responsible for the weekly publication of Argyle Diamond Investments listings, which give specific references to the prices of diamonds in the professional sector.
Therefore, caution should be exercised if investing in pink diamonds paying for them a price referenced to a certificate. We could be carrying out an excessively expensive investment.
– Handling the price of the pink diamonds
It must be taken into account that, like any other good, the cost of the diamond is very influenced by the offer; that is, the number of precious stones in the market.
Pink diamonds have enjoyed excellent price stability because producers drastically reduce production when demand is low. It is true that pink diamonds have a notable demand from the industry (in fact, only 20% of the diamonds extracted are used for jewelry) and the world’s reserves are slowly running out. However, it must be taken into account that its price has been and remains subject to manipulation.
– Online shopping
Although almost all respectable diamond houses have an online presence, the purchase process should always be done in person and with the inter mediation of an expert. Otherwise, we can be victims of the sale of synthetic pink diamonds or fake pink diamonds for the price of real bright.
As you can see, Investing in pink diamonds is an attractive alternative for anyone wishing to diversify their portfolio and reduce risk.