We are at an interesting moment in history where the masses are just now beginning to take diamond investing more seriously. The decline of diamond availability has already begun (The Last Diamond Unearthed: The Countdown is On!), with major mines closing forever (All about Argyles), and consumer demand increasing due to diamond rarity and pop culture obsessions (Pink diamonds in the spotlight). It is no wonder why more smart investors are using investment-grade diamonds to safely store their wealth (Why color diamonds are a safe investment) and to easily pass down their assets to their heirs with minimal tax implications (Tax implications of diamonds).
Now is the time to begin your diamond investment journey - before market saturation, before increased pricing demands, before all the best diamonds are taken off the market, and, hopefully, way before the last investment diamond is unearthed and the last mine is closed forever - which WILL happen within the next two generations.
“The state of mind that we all need to adopt is that the second-hand market will thrive and dominate diamond trading in the coming years. The last diamond that will be unearthed in about 60 years will hail in a new era, following decades of sharp price increases of diamonds in general and Fancy Color diamonds in particular.”
Rayah Levy
President
FCD Invest
Jewelry Ranks Top of Luxury Performers – Bain
Jewelry was one of the best-performing categories within the luxury sector between the end of 2023 and the first quarter of this year, proving popular with buyers at both the upper and lower ends of the segment.
The growth is the result of a move by consumers toward purchasing pieces for investment, according to consultancy Bain & Company, the group reported last week in its latest luxury goods study, in collaboration with Italian luxury goods association Altagamma.
Younger Affluents See Watches, Jewelry As Investments, Says Survey
A new Bank of America survey has found that wealthy younger people are skeptical of traditional investments like stocks and bonds, but are more inclined than their elders to park their money in “collectibles,” like watches, jewelry, and wine. The survey polled 1,007 people with at least $3 million in investable assets.
The bank’s Study of Wealthy Americans found that 72% of consumers aged 21 to 43 agreed with the statement “It is no longer possible to achieve above average investment returns by investing solely in traditional stocks and bonds.” That statement won support from only 28% of wealthy Americans aged 44 and up.
However, 94% of Generation Z and millennial consumers said they were interested in “collectibles”—a preference that was shared by only 80% of wealthy Gen Xers, 57% of boomers, and 55% of the Silent Generation.
As for what collectibles younger affluents were interested in, 39% of the 21-to-44-year-old cohort said they were interested in jewelry as a collectible, compared with 20% among those 44 and up.
Investing in Diamonds: What Every Buyer Should Know
The diamond market requires a keen understanding of the nuances influencing pricing and market value. Pricing trends fluctuate based on many factors, including economic conditions, rarity, and consumer demand, painting a complex picture of the market’s dynamics. Distinguishing between retail and investment-grade diamonds is essential; while the former caters to consumer jewelry preferences, the latter are selected based on stringent criteria for long-term value appreciation. Investment-grade diamonds are often rarer and possess qualities that are highly sought after in the market, making them a distinct category with their unique market behavior. By comprehending these elements, investors can make more strategic decisions when delving into the diamond market.
NOTE: Lab grown diamonds are not investment-grade diamonds!!
Adding another facet to the investing portfolio: How to buy and sell diamonds
Diamonds are precious because they’re rare. The rarer they become, the more valued they hold. In rough economic climates, diamonds can act as a hedge against inflation and are used as a safe haven asset because they can be stored physically in a vault, unlike other invisible and volatile stocks.
The Australian Diamond Portfolio said not all diamonds were considered investment opportunities. Those looking to invest in a diamond must invest in something rare and in demand to ensure there will be a robust resale market when they want to sell. Rare pink diamonds stand out as the highly liquid and sophisticated segment within the realm of collectible assets.
These diamonds possess the unique advantage of being discreetly and legally transportable, facilitating global sales in major cities. The market boasts a diverse array of participants, ranging from collectors and investors to dealers and discerning jewelry buyers.
However, determining the opportune moment to sell these diamonds can pose a challenge. Like the real estate market, finding an ideal buyer may require a patient approach and an awareness of market dynamics. The diamond market is considered decentralized, as there is not one exchange or market where most transactions take place.
Beyond Sparkle: Diamonds Shine As Nature's Masterpiece And Savvy Investment Choice
From the sparkle that captivates hearts to their resilience, diamonds are more than a symbol of luxury. They're a testament to the beauty and strength found deep within Earth's crust and formed under intense pressure and heat. But diamonds are more than a gemstone used for adorning royal crowns or declaring undying love; diamonds are increasingly viewed as a smart investment.
"With bank and crypto failures and inflation, I definitely see more interest from clients who are thinking of jewelry as a store of wealth," Lee Siegelson, who specializes in vintage pieces and rare stones, told the RobbReport.
The global diamond market was valued at $96.4 billion in 2022 and is expected to grow at a compound annual growth rate of 3.2% from 2023 to 2030, according to Grand View Research.
Diamond prices are expected to rise as the supply becomes tighter. The supply is expected to diminish, especially since the G7's ban on Russian diamonds, which could cut 30% of the world's diamond supply.
Investing in diamonds and other gemstones is a growing trend, with top brokers indicating that more clients have been looking to invest in jewelry and loose gemstones.
Investors own just 1% of the diamond market compared with 32% of the gold market, 19% of the sliver market and 17% of the platinum market, according to Allied Market Research.
NOTE: FCD Invest does not endorse Diamond Standard Co.
Following a record year, the stalled luxury goods market faces a dilemma between catering to top clientele and reaching new audiences amid ongoing complexities
Jewellery stands out as a top performer in the current landscape, with consumers making investment-led purchase decisions, surpassing watches in growth and showcasing strength in both uber- and entry-luxury segments.
“A dual strategy, framed around the allure of top-tier clientele and the appeal of smaller luxury indulgences, is driving growth at both ends of the price spectrum,” said Federica Levato, partner at Bain & Company and leader of the firm’s EMEA Luxury Goods and Fashion practice, co-author of today’s report.
Please email FCD Invest at info@fcdinvest.diamonds to discuss your personalized long-term investment strategy.
For more information on Fancy Color Diamonds as an investment, please visit our Fancy Color Diamond informational page linked here.
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