Investing in Pink Diamonds During Times of Economic Uncertainty

The Coronavirus outbreak has presented governments, business owners, and the rest of us for that matter, with a very significant dilemma...Do we open up the economy but risk the health of the public, or do we keep everything closed and risk the health of the economy?

There is no definitive "correct" answer.  The reality is that upwards of 40 million Americans have filed for unemployment, and global economies have not fared much better, but markets are trying to take small steps to cautiously reopen in an attempt to start "saving" the economy. Even in this case however, things will not go back to normal instantly, especially for industries reliant on travel.

But what if we don't fully reopen or if it takes a long time to open? Does the government continue to pay the hard-hit individuals, ultimately leading to inflation concerns?

If the above doesn't occur and the economy is still not fully reopened, how do the hardest hit pay their bills? Does this create a long-term contentious and fractious economy filled with uncertainty?
These are without a doubt really difficult choices and there will be winners and losers in each situation. Regardless of the decision taken, the economy will be in a state of flux and uncertainty, so what might you consider doing? How do you proceed with protecting your wealth?

Let's consider 3 choices:

1) Keep your money in the stock market and navigate tumultuous waters
2) Pull all your money out of stocks, and move to cash, but then risk inflation
3) Find a safe-haven during these difficult economic times and ride out the storm

The most appealing choice to many will be number 3, but where do such safe-havens exist and how can you find them?

The Best Lessons are Learned from History

The most recent instance of true financial turmoil was a little over a decade ago, when we experienced the 2008 financial crisis followed by a multi-year recession. Those who kept their money in stocks were hit the hardest and took about 6 years to fully recover.  However, investors that decided to go another route; the route of alternative asset investing, experienced remarkable gains during that same period!

Treasure assets such as precious metals, classic cars, vintage watches, and art were go-to’s for many investors back then but there was another emerging asset that was unaffected by the state of the economy; diamonds. Investing in diamonds, especially colored diamonds. With more and more investors educating themselves, they were able to leverage their investments in colored diamonds to not only act as a safe-haven for their wealth but also for appreciation too.

 

As we can see from the graph above, colored diamonds, and in particular pink diamonds, saw a significant increase as investors turned to treasure assets to diversify and strengthen their portfolios.

But Why Pink Diamonds in Particular?

The growing interest in Pink diamonds during recent years can be attributed to the imminent closure of the iconic Argyle diamond mine. Located in the West Kimberly region of Australia, the Argyle mine is responsible for producing over 90% of the world’s pink diamond supply, but it’s not only that. The pink diamonds that come from this mine, also known as the Argyle Pinks, have a quality and saturation unrivaled by any other, and is a contributing factor to their price premium.
With the closure of the mine in November of 2020, natural pink diamonds are not only getting rarer by the minute, the Argyle Pinks are now also finite. With such limited available supply and demand constantly growing, the value of these pink Argyle diamonds is expected to increase even more.

Pink Diamonds as a Secure and Portable Investment

In addition to being an exceptional alternative asset, unaffected by economic turmoil, and with potential for a very significant increases over the coming years, pink diamonds have also seen a surge in popularity due to their “convenient” nature. While most tangible assets require considerable storage space, vaults, care, and often go without being enjoyed by their owners, pink diamonds can be easily stored, moved, and worn.  Colored diamonds are highly portable and durable, and can be either stored right after purchase, or be later set in jewelry (if bought loose,) allowing you to enjoy and wear your investment.
With months or even years of economic uncertainty ahead of us, investing in assets that will not only secure your wealth but also potentially increase, sounds like a very safe alternative.

We stand ready to work with you!

With over 40 years of cumulative experience, Rare Diamond Investor strives to provide industry leading insight, stay on top of the latest trends, and provide high quality colored diamonds to all our clients. We have built vast and longstanding relationships throughout the colored diamond and gemstone markets and together with our years of experience and accumulated knowledge, we are fully committed to not only meet our clients expectations, but to exceed them.

If you would like to get some additional information regarding colored diamonds or if you are in the market to invest, please feel free to schedule a meeting with one of our leading professionals and we would be happy to talk with you.