Learn: Diamonds > Investing in Pink Diamonds
Artificial Intelligence & Clarity Grading
Flaws & Cracks
The turbulent investment markets of the past decade, and the rise in value of rare coloured diamonds, has led some clients to ask me to assist them as a broker to buy pink diamonds. I make no predictions or guarantee that past substantial rises in diamond prices, especially fancy coloured and pink diamonds, will continue, or that they are easy to liquidate.
Diamonds have fundamental problems for private investors. The industry is opaque, with high margin and slow stock turns and poor avenues for reselling. Diamonds I buy for stock usually take a year or two to sell.
However I have acted as a broker for some substantial pink diamond purchases and if you are interested we can send you an information pack. This service is designed for people prepared to spend six figure plus amounts to:
- buy and hold forever;
- buy, hold and sell after 5 or 10 years; or
- buy and make available for sale immediately.
The service I offer builds on the information in the Pink Diamond section of this website and includes:
- What makes a “good” pink diamond;
- What is involved in obtaining suitable investment stones;
- The necessary information you will need to make a decision on a prospect stone;
- How to obtain, as well as on-sell, an investment diamond;
- What to look for when researching this further.
I have no expertise in providing financial advice. Before making an investment I research it thoroughly and speak to my own financial advisor. You should do the same.
FAQ’s – Investing in Pink Diamonds
What is the Argyle Premium?
The market adds a premium on diamonds from Argyle mine. Whilst Argyle themselves suggest a near 30% premium my associate Branko Deljanin and I believe 15-20% is a more realistic figure. However, I occasionally see Argyle stones listed by Australian dealers with excessive premiums, reinforcing the importance of having a strong understanding and familiarity with the market.
Since 2009, all pink diamonds from Argyle larger than 0.25ct are certified and laser inscribed with their certificate number. These stones can be verified at the Argyle Pink Diamonds site. Stones cut, polished and sold by Argyle are often repolished to improve their grade from GIA, a sad comment on the level of skill of Argyles’ polishing team. In fact, several Deep Pinks have been recut to achieve the coveted Red grade from GIA; however, Argyle will not upgrade a repolished stones cert.
Where do you buy from?
I prefer to buy fancy coloured and pink diamonds at trade fairs, where I can see many stones at the same time and the market is more competitive. The main international trade fairs are in Hong Kong (because the Chinese market is hot), Basle in Switzerland and Las Vegas.
I usually attend at least three shows; Hong Kong in March and September and Las Vegas at the end of May. Whilst Basle is a huge show, it tends to be focussed on watches and jewellery rather than loose diamonds and accommodation is very expensive.
What are your views on the Argyle Tender?
Every year Argyle hold sealed bid auction tenders for the year’s 50 to 60 most valuable pinks. The stones are taken on an international “roadshow” enabling invitees to view and bid on the stones. Tender bid winners often fear they have overpaid. Each year the trade reports the setting of new high priced sales records and the 2014 Tender appears to have set a new high watermark. However, I will attend if there is enough support from you, the buyers.
Why invest in Pink Diamonds?
At its simplest, they last forever, do not depreciate and require little, if any, maintenance or ongoing costs other than, perhaps, insurance. There are other assets you can enjoy, like a holiday house or apartment in Paris; they may also appreciate but the ongoing costs and monitoring can be extensive.
Diamonds are set and worn, requiring only occasional cleaning and checking of claws. If unset, they require only secure storage. We’re yet to come across an investment which requires so little effort and involvement. But there are no guarantees that the previous decades approximate 20% PA appreciation will continue.
Do you recommend parcels of loose diamonds?
No. Although they are easier to buy, they are invariably harder to sell. Buyers want to select individual stones, making it harder to reprice and sell the remainder, which can take easily take years. Parcels are of use to those buying stones as a business, rather than as an investment.
Why should I use you as a broker?
My knowledge and experience gained from more than thirty years in the diamond industry is unparalleled, I am known globally and respected. This industry runs on trust and I always pay upfront and that is a huge advantage in negotiations. It translates into dollars saved. There is no shortage of sellers or financial advisers offering pink diamond investment services, but many lack the contacts and extensive knowledge required to be truly effective.
Many are aligned with local wholesalers or are partnered or associated with these vendors, adding an extra layer of handling and costs. Some will recommend buying at auction; buyers AND sellers pay high commissions. Several Australian diamond merchants sell their old stock and speculative diamonds via the big auction houses, which can be a good buying opportunity compared to retail prices.
The problem with auction houses is they add a seller’s and a buyer’s margin, which I have always found can add up to a considerable sum when buying. Buying at international trade fairs where I can sight stones, compare prices and negotiate with vendors means we will acquire stones at the prices before auction houses add their 10% to 25% premiums for sellers which are compounded by similar premiums for buyers.
What currency do you transact in?
At a trade level, all prices and diamond transactions are in US$. It is impossible to hold an Australian dollar quote so we will work only in US$ and any settlements will be based on the bank exchange rate on the day.
Why would Pairs or suites be of interest to me?
Stones that make suitable pairs can be worth up to half as much more due to the demand for earrings and other pieces of jewellery requiring matching stones. I will look out for any potential match for any stones you have purchased.
You may decide to buy the matching stone, or I can inform the owner that you have a match and are willing to sell to them. Alternatively, we can arrange a partnership, where one or both parties offer the pair for sale.