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At Hard Carbon we enjoy working with new investors to the fancy colored diamond market. If you are not familiar with the investment opportunity of fancy colored diamonds the following article will help you understand how to get started in this dynamic world. With decades of experience Hard Carbon is one of the leading dealers of fancy colored diamonds in the United States and Canada.
Reasons to Invest in Fancy Colored Diamonds
Like the related assets of gold and silver, fancy colored diamonds are incredibly rare and sought after which makes them a hard asset that is an attractive inclusion into any investment portfolio. It is estimated that only 1 out of 10,000 diamonds found are colored and the demand for them far outpaces the supply.
Research Pays Off
When looking for an investment opportunity it always pays to do your research. There are numerous benefits to investing in fancy colored diamonds over other assets. First, the data from Rio Tinto (the owner of the Argyle mine) show that the prices for their Argyle pink diamonds have risen 500% since the year 2000; pink diamonds especially have become highly sought after.
Fancy colored diamonds are an asset that requires little upkeep and are relatively easy to secure. Nor do they weaken or diminish over time – diamonds are one of the strongest materials on earth and are virtually indestructible.
Before delving into the world of fancy colored diamond investment, make sure any diamond you consider buying is certified by the Gemological Institute of America (GIA). GIA was founded in 1931, is a non-profit institute and the world’s foremost authority on diamonds, colored diamonds, and pearls. GIA sets the standards and their certifications are fully trustworthy. At Hard Carbon all our diamonds are certified by GIA.
The Importance of the ‘4 C’s’
When purchasing fancy colored diamonds having knowledge of the ‘4 C’s’ is important. The 4 C’s stand for Color, Clarity, Cut and Carat. A quick of overview of the 4 C’s:
Color – Within the realm of colored diamonds there are 13 major colored diamond categories including the important ones of: red, blue, purple, pink, violet, orange, green and yellow. Less important colors include browns, grays, blacks and whites. One of the most unique colored diamonds is the chameleon, a colored diamond that changes color in front of your eyes. However, in most colored diamonds, the diamond has secondary hues like orange/yellow, blue/ gray, etc., providing a rainbow variety of different beautiful color combinations.
Clarity – Each colored diamond is unique and can include individual characteristics called ‘inclusions’; each diamond needs to be closely inspected to determine the number and position of inclusions to establish its clarity. GIA has established 6 main clarity descriptions which are:
Flawless, Internally Flawless, VVS1/VVS2, VS1/VS2, SI1/SI2, and I1, I2 and I3 with only the I clarity inclusion capable of being seen by a naked eye.
Cut – Perhaps the most well-known of the 4 C’s is the cut of the diamond. The cut of a diamond greatly affects how it interacts with light and therefore its brightness and sparkle. There are 11 main cuts with multiple modifications in each cut currently in use.
Carat – The carat weight is a term of measurement for how much a diamond weighs; the heavier the diamond the more valuable.
When approaching any investment opportunity, it is always prudent to make yourself aware of industry news and trends. One of the biggest shifts in the fancy colored diamond market in recent years was the recent closure of the Argyle Mine. Located in Western Australia, The Argyle Diamond Mine was one of the world’s major sources for pink and purple diamonds. The Argyle Mine opened in 1983 and during its years of operation, produced 865 million carats of rough diamonds. Beyond purple and pink, they also produced lower cost brown and very rare red and blue diamonds. Diamond mines tend to operate for decades, but naturally over time their resources get depleted. As mines close or wind down operations the fancy colored diamonds they produce often rise in value due to scarcity of availability.
An Investment You Can Enjoy
One of the most attractive aspects of investing in colored diamonds is that they can be incorporated into pieces of jewelry to be worn during the time you own them. Their durability means that unlike cars or artwork that require a high-level of upkeep and care – fancy colored diamonds can be worn every day and enjoyed while they increase in value. If you don’t feel comfortable wearing your colored diamond then they can easily be stored in a bank deposit box or even your home safe.
A Wise Investment Strategy
At Hard Carbon we advise our clients to consider their investment in colored diamonds as an investment to hold on to for a minimum of 3-5 years. But many clients hold onto their colored diamonds as an investment for much longer which indeed can be a valuable strategy. Pink diamonds for example have appreciated more than 500% in the past 20 years, outperforming all major equity markets. Keep in mind that colored diamonds are bought and sold on the private market, so they are never shorted like gold and silver, but because the market is private, they may take a bit longer to sell. At Hard Carbon, we offer clients numerous exit strategy options to maximize the profit on their investment. Due to our extensive client network we can often find buyers within our client base.
We advise our clients to diversify their portfolio of fancy colored diamonds. Depending on how much you wish to invest we can advise and guide you on how best to plan your purchase. Some clients wish to invest one lump sum in one colored diamond, others prefer to divide their investment up among smaller stones. The beauty of colored diamonds in your investment portfolio is that they are easily upgraded to a better diamond
Ask Us All The Questions You Have!
At Hard Carbon we are always available, and in fact encourage our clients to ask us lots of questions and become knowledgeable on the color diamond market. Including colored diamonds in your investment portfolio is a wise decision: they are portable, resilient, maintain value and are expected to increase in value. For decades they have remained a highly sought after item.
Hard Carbon has extensive experience and is one of the leaders in the North American colored diamond market. Our global network allows us to source diamonds for our clients from every diamond mine and investor in the world. Our ability to access literally thousands of colored diamonds enables us to find the one to best suit our client’s needs.
Give us a call today so we can get you started on the exciting world of fancy colored diamond investment!