Pink Diamonds As A Promising Investment Avenue

Investing a large sum of money is a complicated decision. You want your investment to grow in value, at the same time you want to make sure that your investment remains safe. There are many cases of fortunes lost and made in the stock market. Even a good understanding of finance will not guarantee you a safe and lucrative investment. Investors are always on the lookout for new avenues to diversify their investment. Security markets can be volatile, there are always uncertainties and fears of an ever-looming recession. High net worth individuals usually turn to art, antiques, commodities or complex financial instruments. Diamonds represent timelessness; this attribute has been used to sell them. They are also rare which makes them precious and expensive. Pink diamonds being rarer are more expensive.

What are they?

Yellow diamonds contain traces of Nitrogen, Blue ones contain Boron. While scientists are not sure what gives pink diamonds their colour, there is no doubt about its value. In the year 2017, ‘The Pink Star’ was sold at a public auction for $71.2 million. This set the record as the most expensive coloured diamond to be sold. The Argyle diamond mine that opened in 1983 in Australia produces over 90% of pink diamonds. It is scheduled to be exhausted by the year 2021. This will make these diamonds even rarer and hence their rate is expected to grow at an even faster rate. Currently, it sees an average growth rate of 13.8%. This outperforms most investments and is one of the safer options anybody could think of.

Why are they special?

From an investment perspective, loose stones are preferable to jewellery. The value of a pink diamond depends on its hue (primary colour), overtone (secondary colour), and saturation (intensity). The stones that have a deeper colour are rarer and hence more expensive. There are also synthetic pink diamonds, but they are not nearly as valuable or as wise an investment as their naturally occurring counterparts. If you are not an expert you should invest through an investment firm like as you may not be in a position to ascertain the valuation, take care of the sourcing, delivery, insurance etc. It would also make the process easier if you are selling at a later date.

What does the future look like?

While pink diamonds have been performing extremely well since the 1990s when people initially started investing in them, it is anticipated to grow even more due to the impending scarcity in the near future. In the past 18 years the value of pink diamonds has grown by around 400%. Since they are not financial instruments, they do not come under the ambit of capital gain tax laws. Economics at most levels work on the principles of demand and supply.  While the demand for pink diamonds keep growing there is bound to be a massive shortage on the supply side very soon. The demand tends to grow even more when a pink diamond is involved in a celebrity engagement.

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