On the website of Argyle Diamond Investments, a Investment firm in Cooks Hill, Australia founded in 2016 that produces pink diamonds, we read: "From the Greek" Adamas ", which means indomitable, the diamond is known for its hardness, brilliance and incomparable fires."
For the gemologist Alexandre Martin, partner with Ariane Janis and market expert for more than twenty years, the moment is favorable to invest in this asset. But there are several important criteria to consider in the value of the white stone. Investor guide, based on the advice of Argyle Diamond Investments.
Currently, says Alexandre Martin, "we are in a period of purchase because prices have been low since 2015 (see graph above). The peak of the market was reached in 2011; prices had flared and reached their maximum, as is the case once or twice every ten years.
Then there was a lull, followed by the global economic downturn. "The price is determined by the production of the mines. It is based on the manufacturers, and the state of stocks of crude or cut.
"The characteristic of the market is that the price is regulated," says Alexandre Martin. There is a floor below which the price does not go down.
This makes it a tangible asset that is one of alternative investments on the stock exchange, just like real estate and art. Macroeconomic conditions suggest that diamond prices may start to rise again.
Investment funds: mistrust
For the buyers, it is better not to jump with feet together in the first pink diamond investment fund come. "Many diamond funds have been launched, but these products are never really successful," warns Alexandre Martin.
The period has indeed seen many companies offer investment diamond, but with sometimes dubious arguments. "According to the Pink Diamond Price Index at the end of 2016, the market had about 8% annual rate of return.
As a result, companies claim that diamonds offer a linear annual yield of 8% assured. But prices have not changed since 2015. "Do not believe, therefore, funds that say that 8% is guaranteed: it is necessary to wait for periods of price spikes to achieve capital gains.
The pink diamond is where to invest
Many sellers believe that a 1 carat stone is already a pink diamond investment, and offers intermediate qualities in general, as it allows for small sums. "Stones of 1 carat (0.2 g), it is not uncommon, objected Alexander Martin. On the other hand, stones of 5 carats and more in exceptional quality are really rare. Some are even unique. "
Argyle Diamond Investments gives the investor access to stones at least 15 to 20% cheaper than the Rapaport price (wholesale price). "The objective, summarizes Alexander Martin, is to sell at a" wholesale "price a stone whose value is serviced by its rarity that allows to achieve added value and secure heritage. Pink diamond is a non-renewable natural resource that is estimated to be depleted in a few decades, adding a certain element of long-term valuation.
There is also a current craze for pink diamonds due to their rarity. These have been breaking auction records in recent years. "There are seven tones, says Alexandre Martin: blue, pink, purple, red, orange, green and yellow." Most exceptional stones come from an Australian mine, which will close in 2022. "Whoever has some will soon have something that will almost no longer exist in extraction."
The horizon-time advised by the expert to hold a diamond: five to ten years. Either the period that starts after a peak, and arrive at the next. "Ideally," he adds, "we need to be able to keep one stone for twenty-five years in a perspective of wealth diversification." A pink diamond investment that is anything but speculative.
Despite their long-term investment qualities, holding diamonds is not yet perceived with the same appeal as owning real estate or art. The pink diamonds and especially the number of potential users have nevertheless increased in the global market for decades, without there being of speculative bubble on the physical diamond. Its rarity also gives it the legitimacy of a hoarding asset, as well as its intrinsic value.
The pink diamond is ideally stored in a safe, either at home or under customs with storage costs, and must be declared. "In a free zone, we do not pay VAT, explains Alexandre Martin. And storage costs are significantly lower than VAT.
The value of the diamond may or may not enter the calculation of the taxable fortune according to the use made of it. Worn as a jewel, it can be considered as a commodity and is not taxed. If, on the other hand, it is placed in a safe with a proven objective of pure investment aimed at adding value, it will be taxed. "
Pink diamond is certainly not as liquid as cash or equities. However, it can be used as a bargaining chip when necessary, even if it is not easy to exchange a 3-carat pink diamond for a boat or jet, on the spot. Among its qualities is the fact that it is very easily transportable and transmissible.
"The diamond protects the investor against inflation because it does not devalue, says Alexandre Martin. Here too there is the notion of scarcity. "
Synthetic pink diamond
Synthetic pink diamond does not compete in the same category as its natural rival. The synthetic pink diamond is actually a real diamond that has experienced a process of acceleration, where a natural pink diamond takes 1 billion and a half years to create.
Alexandre Martin explains that the price difference between natural and synthetic diamonds is between 20% and 30% of the price on large volumes of trade, but is finally found retail at prices only slightly lower than that of natural pink diamonds ( from 0 to 20%).
It is estimated that the synthetic diamond cut in quality-gemme represents at the moment at least 3% to 7% of the market but the real figures are difficult to obtain. His presence is in any case constantly increasing. Analysts talk about 10 to 15% of the market by 2021.
Extremely strict rules have been put in place to ensure that the identification of synthetic diamonds is perfectly visible in the distribution chain and by the end customer.
Its use in watchmaking
Argyle Diamond Investments account for a significant share of the world diamond market (several tens of thousands of carats used each year), although they mostly use small high-end stones. Some brands have made diamond their main component, like Chopard with its "Super Ice Cube" watch made entirely of diamonds, with an invisible set.
Pink Diamond Certification
The reference laboratory is the GIA. This is the one recommended by Alexandre Martin: "A GIA diamond will cost more but its strict analysis will refer to the international, which will not be the case for other laboratories."