As the world’s oil, property and stock markets continue to pose unpredictable investment opportunities, for those willing to take a longterm view – diamonds are still looking positive as an investment opportunity.
However, it is important to consider which diamonds will offer the best return on investment and the answer is simple: coloured diamonds will always out-perform white (or colourless) diamonds, and the rarer and more vivid the colouring = the more the return.
Since 1959, fancy coloured diamonds have not decreased in wholesale value and have only increased in value every year (on average between 10-15%). Even during the most turbulent financial times – including the crisis of 2008 – coloured diamonds have outperformed every other asset class.
And the reason behind their success? Coloured diamonds are only 0.1% of all the world’s mined diamonds and it is their rarity and exclusivity that make them so valuable. According to the Fancy Colour Research Foundations (FCRF) from 2010 – 2019 the market price for coloured diamonds increased by 77% with Pink diamonds taking the lead with an increase of 116%, Blue diamonds by 81% and Yellow Diamonds by 21%.
Which Colour = Best Investment?
While coloured diamonds are a better investment compared to colourless diamonds, there is a hierarchy in the colour spectrum that reflects their rarity and colouring.
Starting with the most common browns and yellows through to the rarest red, here is our guide to the colours according to investment potential:
Affordable Colours: Black, Brown and Yellow Diamonds (up to Fancy Yellow grading) diamonds. These colours compared to colourless diamonds can sometimes be less in price when comparing their carat, cut and clarity.
Rare Colours: Orange and Yellow Diamonds (Fancy Vivid and Fancy Intense Yellow grading). These stones can peak at five-figures per carat if the colour, carat and clarity are of high enough quality. Historically Fancy Intense Yellow diamonds over 5.00 carats increased by over 350% between 2000 and 2012 and that is only expected to continue, especially when the renowned Zimmi Diamond (intense yellow/orange diamonds from Sierra Leone) increase in value and rarity with only another 15 years of mining remaining.
Very Rare Colours: Green, Pink and Blue Diamonds. These stunning coloured stones are becoming more valuable as their rarity increases in the market. According to Rio Tinto – owner of the world-famous Argyle Mine in Western Australia where 90% of pink and blue diamonds originate – since 2000, the price for pink diamonds has increased by 500%, while a 1 carat Fancy Vivid Blue has increased by 135% in the past 10 years. In 2018 the 18.96 Pink Legacy sold for $50 million at Christie’s, breaking the world record for price paid per carat for a pink diamond at auction. And these prices are predicted to only increase since the mine closed and the biggest source of pink diamonds ceases to deliver.
Most Rare Colours: Red diamonds. This colour is so rare it is virtually non-existent – currently there are only 30 red diamonds that have been found primarily in Australia, Brazil and Africa. Their rarity makes them the highest priced diamond in the world and the last red diamond at auction was the 1.56 carat Argyle Phoenix which sold for $1.25 million/per carat.
Understandably, with a higher investment potential comes a higher price tag, and coloured diamonds will be more expensive than their colourless counterparts. Being the rarest natural gemstones on earth, a blue diamond will be an average of 20 times as expensive, while a Zimmi diamond averages more than two to three times more than a white D Flawless or VVS diamond.
However while there is a higher price to pay, the returns on the investment and the potential for profit make coloured diamonds a natural - and some would say failsafe? - alternative to today’s ever more uncertain traditional investment assets.
If you are interested in buying or selling coloured and colourless diamonds, get in touch with Noble Fine Jewellery’s Diamond Expert Elie Chodos at email@example.com.