Coloured Diamonds

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Coloured Diamonds

Investing in fancy coloured diamonds

Natural coloured diamonds are the most concentrated form of wealth on earth and have such a low profile that you can privately carry, one million dollars on your finger daily and very few people will know or recognize what you have. They are legal and a completely private “bank account” you can carry around in the palm of your hand.

Colored diamonds have always been a wealth secret of moguls, the aristocracy and the super rich. They have been more valuable than white diamonds since the 16^th century, when European gem dealers first ventured to India where the Golconda mines produced unbelievably beautiful colored diamonds.

Today coloured diamonds are found almost everywhere diamonds are mined, but only one in 10 000 carats are fancy colored. Around 80% that are fancy coloured are various intensities of brown. Yellow varieties are rarer followed by pink. Next come intense blue, pure green, pure orange and pure violet. Red is the rarest of all.

Investment Comparison White and coloured

White diamonds are far more common even the popular D colour Flawless and so do not have the dramatic escalation found in colored stones.

Although both are useful to store and transport wealth the astute investor would usually use white stones for short to medium term profits and colored stones (when available) for longer term high return.

A one carat round D Flawless diamond sold for about US$1500/ct in 1970 and now goes for about US16800

Compare that to the price history of a one carat natural fancy blue diamond that sold for about US$5000 in 1970. It is now worth US$150,000.

This remarkable difference reveals the powerful profit potential for coloured diamonds.

While the increase in price varies from colour to colour, none have gone down in price since 1970, the year in which accurate price records were first established.

Coloured diamonds are so rare that De Beers wont even advertise them. If they did the company wouldn’t be able to meet demand.

Benefit Comparison

Benefit	White Diamonds	Coloured Diamonds
Wealth concentration	Good	Excellent
Liquidity	Good	Good
Profit potential (short term)	Excellent	Fair
Profit potential (med to long term)	Good	Excellent
Worldwide Market	Excellent	Excellent
Reportable Financial investment	No	No

Getting Started

Determine the primary purpose of your diamond portfolio.

· Do you want to protect yourself from possible worse case legal or domestic tragedy? If so you will probably want a smaller number of stones with a large per unit value.

· Are you looking for estate wealth that can be passed from one generation to the next? Depending on the number of heirs, more stones with less unit value may be needed.

· Are you looking for an excellent investment that you plan to sell at a later date? A combination of popular fast selling whites and high value coloured could work well.

· Does the fact that diamonds—even if you store them overseas---are not considered reportable investments under most countries tax laws lend themselves to your portfolio needs.

One of the untold secrets of diamonds in general and coloured diamonds in particular is that among all tangible investments they have among the most liquid and sophisticated markets. They can be transported quietly and legally and sold globally in most major cities.