Investors Increasingly Buying Rare Argyle Diamonds
Guardian Vaults introduces you to Australian Diamond Portfolio, who’ve partnered with us as their secure storage partner. We’ve invited Anna Cisecki, to introduce you to the world of Argyle Diamonds. Whilst based in Sydney with an office at our Sydney Vault facility, the team at Australian Diamond Portfolio are happy to assist you wherever you may reside providing an end-to-end solution as the Diamond Investment Specialists.
INVESTORS INCREASINGLY BUYING RARE ARGYLE DIAMONDS
Whilst financial markets ended 2016 on a positive note, it was anything but smooth sailing, with the year characterised by distinct bouts of extreme volatility. First, we saw concerns about slowing global growth and falling oil prices, as well as a negative reaction to the implementation of even more extreme monetary policy in Japan. Mid-year, markets were in chaos, with an initial negative reaction to the unexpected Brexit vote, followed by a recovery which ultimately carried through to the end of the year, despite the surprise election victory of President Donald Trump.
Given the challenging political and economic outlook, we expect this volatility to be a permanent feature in financial markets, both in 2017 and indeed for many years to come. As a result, investors are increasingly look to alternative assets including gold, silver, art, and indeed rare coloured diamonds.
PINK DIAMONDS AS AN INVESTMENT
Why pink diamonds? Firstly, they’re not influenced by the speculative moods of equity markets that create major short-term fluctuations; there are no options, futures or short selling, nor is it a highly leveraged market. The absence of these factors, which can lead to significant levels of added volatility in financial markets, protects diamond investors from these market risks.
On a longer-term basis, rare pink diamonds are a scarce, finite resource with no new sources of supply in the pipeline for the foreseeable future. While prices for typical diamonds have generally remained flat over the past decade, pink diamond prices have seen more than healthy growth due their rarity and concerns about future supply. Rio Tinto’s Argyle mine in Western Australia’s Kimberley accounts for the bulk of the world’s pink diamonds – over 90% of global supply – and is currently expected to cease operating around 2020.
With closure imminent, pink diamonds have seen an average annualised growth rate of almost 13% per annum over the past decade, from January 2007 to 2017.
HISTORIC APPRECIATION OF MAIN PINK DIAMOND CLASSES
On the note of rarity, The Australian Business Review has made one of the most apt statements on the investment potential of these gems – “buying a pink diamond is like buying a painting by Pablo Picasso while he was alive. You know at some point they will run out and increase in value. We have always known it was a limited source and that a time would come when this fabulous fluke of nature would end, but there is a lack of appreciation for what this will mean. In another decade the Argyle Pink Diamond will emerge as the new Faberge egg, the thing myths are made of. The value of rarity is the most priceless factor.”
SO WHO’S BUYING PINK DIAMONDS?
Rare pink diamonds are not just the realm of the uber-wealthy; investors of all types and levels of the market are getting involved, from small private retail investors and wealth managers to financial advice groups, SMSF trustees and family offices. Entry level is typically about AU$20,000, which demonstrates the accessibility of this market to a large swathe of potential investors.
In Australia, the healthy appreciation in pink diamond prices means more and more people are looking to invest in the stones through their self-managed super funds. SMSF’s are able to invest in pink diamonds under the category of ‘collectables’, which also include provisions for asset classes such as works of art and vintage cars.
GETTING INTO THE MARKET
It’s important to note that not all diamonds, indeed not even all pink diamonds, can be considered investment diamonds.The majority of diamonds on the market are actually quite common, and realising a resale value close to the purchase price requires specialised knowledge.
Australian Diamond Portfolio (ADP) is an independent investment diamond brokerage that specialises in the acquisition of rare pink diamonds. ADP provides investors with an easy, end-to-end solution that encompasses every step of the investment process, as well as ongoing services including secure storage, insurance and ongoing valuations.
For more information I invite you to request our 2017 Pink Diamond Investment Guide, a great tool for interested investors to educate themselves further on pink diamonds as an investment. This guide is designed as an introduction for Australian investors interested in exposure to physical pink diamonds as part of a diversified portfolio.
If you’d like to get in touch with the team at Australian Diamond portfolio. Their contact details are below.
P: 02 9238 2727 | E: firstname.lastname@example.org
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