Investment diamonds: Diamonds as an investment
Are you interested in diamonds as an investment?
Diamonds are coveted not only as jewels, but also as valuable investments. Investment in raw materials is particularly popular in times of financial crisis. When considering investing in diamonds, it is important to be absolutely clear about your own goals and intentions and to select suitable stones to match your personal scenario. RenéSim is happy to provide assistance. The diagram on the left shows the trend in diamond prices from 2006 to May 2011and demonstrates the rise in value of diamonds to date.
Diamonds as an investment from RenéSim
A number of criteria are used to determine the quality of a diamond. The anticipated increase in value of the diamond over the investment period depends on these factors. All diamonds from RenéSim are accompanied by a certificate from an independent institution. The decisive factor in considering a purchase is your ultimate intention. While we believe diamonds retain their value extremely well and can represent a highly positive long-term perspective, as diamond experts we advise against investing in diamonds with a view to short-term profit.
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Are you considering investing in diamonds or seeking detailed advice on the subject of diamonds as an investment? Our experts will be happy to assist. Simply send us your request without obligation or call us. We will immediately address your request concerning diamonds as an investment.
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Further information on diamonds as an investment
Why invest in diamonds?
Diamonds for investment have increased in value over the long term without any dramatic falls in price. Apart from general trends on the diamond market, the performance of a diamond primarily depends on its size, colour and clarity. Diamonds are natural assets and not synthetic assets such as money, and represent a high concentration of value in an extremely compact form. Diamonds are an extremely discreet and mobile form of investment, with a value recognised at supraregional and international level. As gemstones, they have a use value that is recognised throughout the world. They are subject to clearly defined classifications and value categories which apply and are recognised in every country in the world. Global demand for diamonds is increasing, and is currently booming in India and China in particular - both countries with an exploding middle class with an appreciation of jewellery. However, the main market for diamonds is still the USA, which has also noted an increase in demand. The global volume of diamonds mined has already peaked and the volume of available diamonds is now falling.
The Four Cs as key criteria for investment diamonds
The Four Cs are among the key criteria of the value and potential increase in value of a diamond. They represent the most important information required to estimate the value of a stone. The Four Cs of a diamond are Colour, Carat, Clarity and Cut. The higher the rating in these categories, the higher the value - and thus the potential increase in value - of the diamond. Anyone considering diamonds as an investment should seek expert advice on these important criteria in order to select diamonds that represent the best investment.
Diamonds as an investment: What certificates are available?
Anyone planning to invest in diamonds should first investigate the certificate supplied with the diamond they select as an investment. Diamonds intended as an investment should be accompanied by a certificate from a recognised gemological institution. The certification institutions with the highest reputation worldwide are GIA (USA), IGI (Belgium) and HRD (Belgium). These gemological institutions guarantee the authenticity and quality of a diamond. Please note that the evaluation criteria applied to diamonds by these institutions may vary. GIA, IGI and HRD are noted for their particularly stringent evaluations and thus have the highest international reputation.
Diamonds as an investment: Trends in diamond prices
Diamond prices have remained remarkably stable over the last century, with the exception of a crash in 1980. Diamond prices tripled on average between 1982 and the start of 2009. Even in the wake of the financial crisis triggered by the collapse of Lehman Bros and the resulting uncertainty, investment diamonds fell slightly in price from their peak level but recovered very rapidly, with many quality categories actually increasing in value even in 2009. High demand from Asia and stable demand from the rest of the world has ensured encouraging price trends since 2010. The largest diamond company in the world, De Beers, expects further price increases in the coming years, forecasting that demand for diamonds will continue to outstrip supply. The reason for this is that many diamond mines are facing exhaustion over the medium or long term and few new mines are being opened. Diamonds thus represent an extremely interesting investment opportunity or option of sustainable and potentially increasing value.
Diamonds as an investment: Forecasts for 2012
In general, the majority of experts anticipate the diamond market to develop positively in 2012. However, the Eurozone debt crisis has spread uncertainty to the diamond market too. Major economic disruptions naturally impact negatively on the diamond market as such, particularly in low and medium-quality categories such as those used for low to medium-priced jewellery. On the other hand, the financial crisis is intensifying the demand for diamonds and diamond jewellery for asset protection purposes, so that performance trends of very good to excellent quality categories in particular can be anticipated – not despite the global financial crisis, but actually because of it.
Good prospects for performance of investment diamonds forecast up to 2020
A new study conducted by Bain & Company on behalf of the Antwerp World Diamond Center (AWDC) predicts that demand for diamonds will double by 2020. This represents a rise of 6% per year, although annual growth in supply is forecast at a mere 2.8%. The reason is the enormous growth of the middle classes in the newly industrialised countries of India and China. In terms of demand for diamonds, these countries are likely to overtake the USA, which currently shows the highest demand. This means that prices for investment diamonds are likely to rise significantly in the coming years, making diamonds a potentially lucrative investment prospect.
(Source: Handelsblatt, issue 12 April 2012)
If you are interested in loose diamonds, feel free to search our diamond database and use filter settings (price range, carat, colour, cut, shape, clarity, certificate) to select the diamond you desire: Purchasing Diamonds.
Our compact overview of diamond information provides key facts on the topic of diamonds: Diamond - The King of Gems.
Our extensive Diamond Dictionary provides detailed information on diamonds. Find out more about the Four Cs (Cut, Clarity, Colour, Carat) here: Four Cs.
RenéSim's history in the jewellery and diamond industry extends back over five generations. We love diamonds and encounter the high demand for these beautiful products of nature on a daily basis. However, future price trends cannot be predicted with any objective certainty, and we are neither qualified nor formally obliged to make forecasts. We are happy to share our personal perspective concerning diamonds with you and assist you in selecting interesting diamonds at optimum quality. However, we are both unwilling and unable to issue investment recommendations. As in any purchase of material assets, the actual value performance of diamonds as investments cannot be predicted.