Nature produces some remarkable works of art - majestic scenery like the Grand Canyon, gorgeous creatures such as lions or butterflies, and amazing gemstones like diamonds.
Today, in the face of declining real estate values and a globally weak stock market, investors are turning to formal works of art such as painting, sculptures and photographs, as well as to some of nature’s works of art. Specifically, investors are looking at the rarest colorless and colored diamonds as alternatives to traditional investment vehicles.
Are diamonds really generating a good return?
Absolutely. In the past five years diamond industry analysts have recorded a phenomenal 76.5 percent increase in the per carat price for the rare colored, or large colorless stones. What does this equate to for an investor? In 2003 a ten carat colorless diamond would have sold for approximately seven hundred thousand dollars. Today that same stone has a value of two million dollars. That is an increase of over one hundred thousand dollars per carat.
The availability of such stones is not an unlimited commodity however, as only two hundred stones of the appropriate grade and qualities are discovered each year. Where colored diamonds are concerned, the availability is even scarcer, making their values even more significant. Currently the most sought after colored diamonds are the pale blue and pale pink stones.
Industry insiders and fashion experts credit some celebrities with the increasing popularity in colored diamonds - from the giant pink diamond engagement ring given to Jennifer Lopez by Ben Affleck to the purple diamond given by NBA star Kobe Bryant to his wife after a very public marital scandal - attention on rare and unique colored stones has caused some of the increase in price and value.
Others say that the diminishing number of stones being found, or entering into the open market, brings the value of existing stones, as well as new stones, to a much higher level.
Either way, just like trends in art or collectibles of any kind, any increase of demand causes an item’s value to rise. Now the colored diamonds and flawless diamonds, which used to be considered mere geological curiosities, are now recognized as rare and extremely valuable specimens of the wonders of nature, popular fashion accessories, and excellent investment properties and this has caused their costs to skyrocket.
The interest in colored diamonds is not a brand new one; there are hundreds of pieces of historic jewelry that relied upon gorgeous examples of colored diamonds to create their mystique or value. In fact some of the world’s most notable diamonds are not known because of their colorless or flawless natures, but because of their size and color. For example, the world renowned “Hope Diamond” is a dark blue stone, and the “Uncle Sam” diamond, the largest ever discovered in the United States, is a pale pink.
While fine art and jewelry have always been an acceptable class of asset investment in the professional financial industry, it is only in recent months that these categories have begun to be selected by a broader and larger range of investors. With real estate and stock markets behaving in unpredictable and incredibly fluctuating patterns, wiser investors are turning to tangible goods such as fine art and diamonds, which are materials of true and lasting value to insure their financial securities.
While diamonds have always been “a girl’s best friend” they are quickly becoming the darlings of worldwide investors. In the last decade alone the gemstone market, and in particular the diamond industry, has seen record prices for stones in the flawless or colored categories. The “Star of the Season” colorless diamond fetched a remarkable sixteen and a half million dollars, or a staggering one hundred and sixty-five thousand dollars per carat.
For those without the good fortune of a spare million or so to invest in perfect or colored diamonds, there are still opportunities to view some excellent examples of the huge range of colored diamonds and flawless stones. Currently, the Aurora Collection, the world’s largest and most comprehensive collection of colored diamonds, will be on display at the Natural History Museum in London through November of 2008. The two hundred and ninety-six stones represent every color in the available spectrum of colored diamonds, and weigh in at a total of two hundred and sixty seven carats.
Of course there are ample viewing opportunities for the many visitors to the Smithsonian Institute’s National Museum of National History, where they can take a long look at the “Hope Diamond” among many other colored or flawless diamonds.
While the world economy is changing and traditional investment vehicles are no longer reliable, diamonds are becoming as treasured as some of the rarest art. Auction prices, and individual sales among dealers, are driving the values and prices of these beautiful stones higher and higher, and as their limited supply dwindles they will only continue to increase in value.
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