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Why diamonds are a rock-solid investment choice

With high street banks continuing to pay poultry interest rates and traditional markets now riskier than ever following tumultuous Brexit discussions, where are the best places to invest your hard-earned money?  Over the last few years we have seen investors increasingly turning their attention to alternative investments, an umbrella term for luxury investments such as watches, fine art, vintage cars and property. Whilst alternative investments are considered riskier than more traditional investments such and stocks and shares, they have the potential to provide much higher returns and there is an enjoyment factor that comes with investing in something tangible that sets alternative investments apart. 

One alternative investment that has seen a surge in popularity over the last 10 years is coloured diamonds. Coloured diamonds have long been perceived as one of the rarest and most precious commodities on the planet, currently accounting for less than 0.1% of the world’s total diamond production, however their increasing rarity due to dwindling resources and high profile mine closures has seen these precious gems significantly increase in value. The Knight Frank Wealth report now includes coloured diamonds on their wealth index and estimates their value has risen an impressive 167% since 2005. When taken on their own pink diamonds are said to have appreciated in value by more than double that figure, no doubt helped in no small part due to the news that the Argyle mine, currently responsible for 90% of pink diamond production, is set to close in 2020.

With these finite resources growing ever rarer and demand continuing to grow, the value of coloured diamonds shows no signs of slowing of down. It’s not just collectors that are interested in buying these stones either, but also high net worth investors who in the past tended to opt for more traditional investments such as stocks and bonds. Over the last few years, coloured diamonds have dramatically risen to the public’s attention with several high-profile auction sales making headlines in the media. These incredibly rare and precious stones continue to excite and entice investors, with many of them selling for increasingly high prices. In 20 the “Pink Star” became the most expensive diamond ever to sell at auction, when it was sold for $71.2 million at Sotheby’s Magnificent Jewels and Jadeite Spring Sale. The beautiful 59.60 carat pink diamond is the largest pink diamond of its colour grade and quality ever discovered.

Other notable auction sales in recent years include the 100.09 carat Graff vivid yellow diamond, which became the most expensive yellow diamond in history when it sold for $16.3 million, and the 14.62 carat Oppenheimer blue diamond, which broke all records at the time of its sale, making an incredible $57.5 million at auction.

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